Business services: reliability amid volatility

Chart

‘Safe and steady’ is a tag that might be readily applied to the sector, and that’s just fine as far as investors are concerned.

Alongside technology and healthcare, business services has emerged as a go-to sector for credit funders attracted by its reliable cashflows and sticky customer relationships. But unlike tech and healthcare, which have been characterised by sky-high valuations as sponsors bet on underlying macro growth trends, lending to B2B service providers is less about high growth and more about steady predictability.