How are direct lending loan values calculated? We introduced the topic in our “Par for the Course” installment last month. By popular demand we’re digging deeper into how experienced managers establish that number. Investors see the output, but don’t always get a picture of the inputs. So here’s a quick lesson on loan valuations in a private credit portfolio.
The first thing to know is a single loan valuation can involve upward of 20 data fields. This includes financials, market comps, outlook, management commentary, and more. Each one is capable of pushing fair value in either direction. Getting it right is as much art as science. And that's where the fun begins...
Quote of the Week
"In private markets, because no one knows the true valuation there’s a tendency to leak information into prices slowly.” - Peter Hecht, AQR (Bloomberg).
Featuring Charts
Chart of the Week: Closer Than You Think
Turns out, the marks agree more often than not. Source: KBRA
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Chart of the Week: The Clear Choice
Transparency and track records matter most to private credit investors. Source: Coalition Greenwich, Private Credit Market Structure Survey
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Chart of the Week: Success, Not Overnight
Private credit’s growth story, over a decade old, is still evolving. Source: Preqin.
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Chart of the Week: Open for Business
When public credit markets close, private credit absorbs the shock. Source: FT, Hinze, Rintamaki, Mondini, Steffen.
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Chart of the Week: Setting Expectations
Despite the headlines, direct lending makes up a much smaller share of household and business debt than mortgages did at the height of the GFC. Source: Apollo
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Chart of the Week: The Bigger Picture
Software became less of a sector and more of a defining strategy — particularly among larger funds. Source: BDC collateral
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Features
Bloomberg: Leveraged Lending Insights – 6/15/2026
US Leveraged Loan Prices Rise Ahead of Fed Meeting Following a Federal Reserve Open Market Committee meeting in which all 12 members unanimously voted to hold rates steady in the face of persistent inflation, expectations of another rate cut this year have all but evaporated. Kevin Warsh, in his first meeting as Fed Chair, committed…
Octus: Private Credit & Deal Origination Insights – 6/15/2026
The Number of Issuers With Nonaccruals Maturing Through 2028 Increased by 4% in Q1’26 Request access to the full report HERE or email kim.giancaspro@octus.com… Subscribe to Read MoreAlready a member? Log in here...
Middle Market & Private Credit – 6/15/2026
U.S. Private credit default rate remains at record high 6.0% in May 2026 Click here to learn more. Fitch Ratings recorded a U.S. Private Credit Default Rate (PCDR) of 6.0% for the TTM ending May 2026, unchanged from April 2026…. Subscribe to Read MoreAlready a member? Log in here...
The Pulse of Private Equity – 6/15/2026
US PE middle-market deal activity by quarter Download PitchBook’s Report here. The middle market got off to its strongest start since 2021, even as its share of PE deal value dropped to the lowest level on record…. Subscribe to Read MoreAlready a member? Log in here...
Leveraged Loan Insight & Analysis – 6/15/2026
BDC investments maturing by end of 2027 total over US$21bn, representing 8.5% of loan assets The maturity profile of BDC loan investments does not point to a major deterioration in the near-term…. Subscribe to Read MoreAlready a member? Log in here...
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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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