As we’ve noted, the banks and private credit managers occupy different places in the corporate finance ecosystem. That’s not to say, of course, that large corporate financings don’t represent real investment opportunities for the right buyers. Or that the expansion and evolution of private capital won’t lead to interesting and constructive solutions for a wide range of market challenges. But it’s important to understand the elements that differentiate the two. And more broadly, what makes an alternative allocation in the 60/40 model so rewarding to investors.
Let’s take a step back and see where private credit is in its decades-long journey. Since 2007 the asset class has grown to $1.7 trillion. Whether in recessions or growth spurts, zero or record-high rates, pandemics, supply-chain crises, open or closed public credit markets, expanding or compressing spreads, and hot or cold M&A, nothing has stopped its fundraising and investing...
Featuring Charts
Chart of the Week: Liquids Lag
Return performance of broadly syndicated loans consistently lags private credit. Source: Hamilton Lane, Bloomberg, The Daily Shot.
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Chart of the Week: Working From Home
Slower M&A has extended time PE-owned companies in portfolios to ten-year high. Source: PitchBook
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Chart of the Week: Home in the Range
The threat of tariff-triggered inflation should keep Fed Funds rates range-bound. Source: iCapital, Bloomberg, Federal Reserve.
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Chart of the Week: Still Growing
The strength of the US economy since Covid is expected to continue this year. Source: iCapital, Bloomberg.
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Chart of the Week: Up the Middle
Total middle market loan volume for 2024 at $51.3 billion was the highest in eight years. Source: Fitch Ratings, Lev Fin Insights.
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Chart of the Week: Wide Dispersion
BSL defaults at 3Q 2024 were more than six times those in private credit. Source: Proskauer (Private Credit), Fitch Ratings (BSL), as of September 30, 2024.
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The Pulse of Private Equity – 3/10/2025
Morningstar PitchBook Buyout Replication Index excess performance attribution (annualized) Download PitchBook’s Report here. A returns-based factor analysis using the Fama-French five-factor model plus momentum reveals that the positive alpha from security selection can be explained primarily by a higher market beta…. Subscribe to Read MoreAlready a member? Log in here...
Middle Market & Private Credit – 3/10/2025
US Private Credit Defaults Rose Sharply in 2024 While Lender Losses Remained Limited Click here to learn more. Join Fitch Rating upcoming Webinar: The Highs and Lows of Private Credit Defaults and Recoveries The default rate in Fitch Ratings’ portfolio of U.S. privately monitored ratings (PMR) rose sharply to 8.1% in 2024. This is the…
Bloomberg: Leveraged Lending Insights – 3/10/2025
Monthly Returns Diminish Amid Heightened Uncertainty The Bloomberg US Leveraged Loan Index (Ticker: LOAN), a measure of the US institutional, broadly syndicated, leveraged loan market, returned just 0.21% in February, marking the weakest return since October 2023…. Subscribe to Read MoreAlready a member? Log in here...
Leveraged Loan Insight & Analysis – 3/10/2025
M&A Deal Activity Amid the whiplash of “will they or won’t they” come into effect, talk of tariffs have contributed to the slowest start to the US M&A calendar in ten years…. Subscribe to Read MoreAlready a member? Log in here...
PDI Picks – 3/10/2025
Tried and trusted approach embraced by LPs Many are expecting a recovery in private credit capital formation in 2025, but it’s the long-established direct lending strategy that’s expected to benefit most. “Higher for longer” interest rates are not good news for everyone – ask placement agents for example. These are the professionals that make their…
Middle Market Deal Terms at a Glance
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Beginning in July 2022 The Lead Left published a series of articles on credit market. This report consolidates those articles.
Cov-lite trends Inflation & rising interest rates – LIBOR to SOFR transition Mega-tranche uni trend ESG takes center stage Login to view interactive report and download PDF version. … Subscribe to Read MoreAlready a member? Log in here Related posts: 2H 2021 Midyear Outlook Report State of the Capital Markets – Fourth Quarter 2016 Review and
Beginning in September 2021 The Lead Left published a series of articles on supply chain. This report consolidates those articles.
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