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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PDI Picks – 3/3/2025
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…
Bloomberg: Leveraged Lending Insights – 3/3/2025
US Leveraged Loan Issuance Slows in February February’s $95b of US institutional leveraged loan issuance declined 49% from January’s $186.4b and represents the lowest volume since last August’s $27.7b. While it was a significant slowdown from last month, February issuance was up 51% from the same month a year ago, and year-to-date issuance is at…
Leveraged Loan Insight & Analysis – 3/3/2025
BDC portfolio marks move lower for majority of funds that have reported 4Q24 earnings BDC earnings season is underway, with 50 funds having filed their 4Q24 results as of February 28th. For this cohort of BDCs, portfolio loan valuations have moved lower for nearly 60% funds…. Subscribe to Read MoreAlready a member? Log in here...
PDI Picks – 3/3/2025
Is LatAm worth a second look? It’s one of the most undeveloped private debt regions but demand is there from consumers, SMEs and infrastructure projects. Unlike peers in the US, Latin American institutional investors are under-allocated to alternative assets – but demand is there and so are the opportunities. Challenges, however, include regulation and macroeconomic…
The Pulse of Private Equity – 3/3/2025
Financial leverage for buyout deals by deal year Download PitchBook’s Report here. Greater leverage is another key distinguishing characteristic of buyout-backed companies. Over the past 10 years, the average publicly traded small-cap company has had a financial leverage ratio of total assets to market equity of around 1.4x…. Subscribe to Read MoreAlready a member? Log in
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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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