We mentioned last week our turn at the SuperReturn North America Virtual conference. There we heard participants weigh in on various aspects of the pandemic on private credit, including impact on terms, structures and portfolio performance.

But what about new business? A lot depends on managers’ strategies. Over the past five years, institutional investors have expected a downturn. They pointed to various signs, including overleveraged borrowers and weakened covenants, suggesting excess in the loan market.

As time passed, significant capital was raised to take advantage of fall-out from a recession when it came. Whatever the trigger, market observers predicted a decline in valuations and issuer operating performance on par with the Great Recession. When mainline lenders retreated from financings, opportunistic funds would step in.