How does the dry power get invested now? The market is pausing for thought at a time when there’s plenty of capital waiting to find a home. One constant topic of PDI’s conversations with the market over the last few years has been the inevitability that at some point something would trigger a downturn…. Subscribe
Unitranche in price discovery mode, likely moving back over 600bp Amid falling Libor and more volatile pricing conditions in the syndicated market, unitranche pricing is moving higher after hitting rock bottom levels in 4Q19. So far in 1Q20, the average blended spread on a unitranche is 590bp, up from a low of 578bp in 4Q19….
The Rise of Asian Private Debt A growing middle class in Asia has inflated demand for private debt. This swelling middle class has in turn created growth in the SME market, which has led to robust fundraising. Aggregate capital raised for Asia-focused private debt funds has more than doubled from $3.5bn in 2016 to $8.4bn…
Coronavirus and private equity Our 2020 PE predictions did not include a potentially global pandemic, which continues to roil the markets. It’s impossible to know where things will go from here—at least as panics go, this brings flashbacks of 2008 but feels fundamentally different. For private equity, the only playbook to consult is 2008-2011, since…
Is this the macro event that will drive distressed? With Covid-19 spreading to more countries around the world, the climate for businesses is changing fast. Fund managers at the pure end of the distressed market are only happy when it rains, as the song goes. But up until now, it hasn’t been raining. Given a…
February new issues soften; March is a guessing game February’s tally of direct lending loans softened to 57, from 73 in January, according to Direct Lending Deals. The decreased flow was mainly due to slower-than-expected M&A — all deals were baked before coronavirus fears torpedoed markets last week. Add-on M&A activity declined to 28% from…
As deals get pulled from the market, US institutional loan pipeline sinks under US$14bn Behind a weakening primary loan market impacted by fears of the spread of coronavirus, the US institutional loan pipeline sank to US$13.7bn this week, the lowest level since the first week of the year. This week’s level is a far cry…
The ups and downs of secondaries Download PitchBook’s Report here. Last week we highlighted our new analyst note on extended holding periods. Now available, the note dives into the pros and cons of GP-led secondaries, which have steadily become more popular. The market has become the industry standard for handling successful assets that can’t be held…
First-Time Private Debt Funds Struggle to Raise First-time fund managers have struggled to raise capital in what has been difficult year for overall private debt fundraising. Managers closing their first private debt fund raised $9.7bn in total in 2019. The 38 first-time funds closed secured 9% of the total amount raised in the year…. Subscribe
Are there tastier options than vanilla? Senior debt is still fundamental to many investors’ private debt portfolios. But, as competition increases, LPs are increasingly hunting for less populated spaces. While there is little evidence of investors falling out of love with the senior secured private debt market, competition for mid-market direct lending opportunities is such…