What we learned about 2024 is that many worries identified by analysts and market observers came to naught. Rates, economic growth, and inflation – all areas of concern last January – are in good shape as 2025 rolls out. More robust job growth than expected (see our Chart of the Week) is just one example. As one banker observed recently, what were headwinds have become tailwinds.
The focus now is on mostly global rather than domestic issues. Tariffs, trade, and geopolitical risks are taking center stage. Some of these are theoretical but could mirror events from 2017-2020. And while the rise of bond yields since the election suggest higher inflation to come, capital markets remain full speed ahead. Or as a recent Apollo research report put it, “firing on all cylinders.”
We also confirmed (and others learned) that public and private markets can each perform well without one side stealing from the other...
“Certain more stable economies within Europe, such as the UK, the Nordics and Germany [have become] a focal point for private capital providers.” – Neil Barlow, partner, Clifford Chance.
Featuring Charts
Chart of the Week: Labor on a Roll
December’s job adds topped expectations, suggesting slower Fed rate cuts. Source: WSJ, The Daily Shot
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Chart of the Week: Grade A Markets
Investment grade corporate bond spreads are near record lows. Source: Federal Reserve Economic Data (FRED) – St. Louis Fed, The Daily Shot
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Chart of the Week: Interest Bearing Accounts
After three flat-to-down years, LP’s look to be gearing up for 2025. Source: Private Equity International’s LP Perspectives 2025 Study
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Chart of the Week: To Co-Invest, or Not to Co-Invest
The majority of GPs in Europe and North America offer equity co-investment programs. Source: Dechert’s 2025 Global Private Equity Outlook. (Past performance is no guarantee of future results.)
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Chart of the Week: Bigger Brothers
Since 2020 the share of GPs raising larger funds has been growing. Source: PitchBook(Past performance is no guarantee of future results.)
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Chart of the Week: No Money-Back Guarantee
The absence of realizations has hampered distributions to LPs. Source: Burgiss/MSCI(Past performance is no guarantee of future results.)
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Features
Bloomberg: Leveraged Lending Insights – 1/13/2025
US Leveraged Loan Pricings Smashed Records in 2024 2024 was the year of the leveraged loan, with issuers piling into the market at record levels to reprice debt amid historically high interest rates and an attractive value proposition for investors…. Subscribe to Read MoreAlready a member? Log in here...
PDI Picks – 1/13/2025
Capital raising dips but senior debt going strong Global private debt fundraising fell slightly last year, having fallen each year since reaching a high of $332.8 billion in 2021, according to the latest Private Debt Investor data. The total of $265.1 billion was below 2023’s figure of $272.7 billion as the decline begins to slow….
Middle Market & Private Credit – 1/13/2025
North America Private Credit Default Rates to Stabilize in 2025 Click here to learn more. Join Fitch for the upcoming Outlook panel: Credit Outlook 2025 Private Credit Rating downgrades and default rates for Fitch’s North America Privately Monitored Ratings (PMR) portfolio could stabilize in 2025…. Subscribe to Read MoreAlready a member? Log in here...
The Pulse of Private Equity – 1/13/2025
Global PE exit activity Download PitchBook’s Report here. 2024 recorded just under 3,800 completed PE exits, for an aggregate of over $900 billion (including estimations)…. Subscribe to Read MoreAlready a member? Log in here...
Leveraged Loan Insight & Analysis – 1/13/2025
Nearly 83% of total 2024 US institutional loan volume represented refinanced credits Arrangers of leveraged loan debt kept busy in 2024, raising nearly US$1.7trn of issuance during the year…. Subscribe to Read MoreAlready a member? Log in here...
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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