Private credit: How asset managers are changing the industry

Private credit 🤝 private wealth Private credit is expanding as fund issuance rises to meet investor demand. PitchBook estimates total assets under management at $1.6 trillion, driven by strong performance—US direct lending funds returned over 11% in the past year. Our upcoming roundtable at IMpower FundForum will feature Harriet Steel, Amit Bahri, José María Martínez-Sanjuán, CFA, CAIA, Mattis Poetter, Aymeric Martin, Gaetan Aversano, Raman Rajagopal and Dan Robinson who will discuss the benefits of private credit for private wealth. They’ll also explore how GPs are educating distribution partners to better meet client needs and the crucial questions wealth platforms should ask to align with their investment goals. Read more by James Williams and come to IMpower FundForum prepared to discuss this further 👉 http://spr.ly/60405vD7A #privatecredit #privatewealth #privatemarkets #investmentstrategies #directlending

The private credit market is witnessing a growing divide. While giants like Intermediate Capital Group and Ares Management are securing record-breaking capital for direct lending strategies, smaller players are finding it tough to compete. The $1.7 trillion private credit asset class is increasingly becoming the domain of a select few, with scale proving crucial to success. As interest rates stay elevated, larger credit managers—like Blackstone, Apollo, and Goldman Sachs—are leveraging their scale to become "one-stop-shops" for corporate debt financing. Meanwhile, mid-tier firms are struggling to raise new funds in an environment that favours those with deeper pockets and stronger track records. For investors, the focus is now on those with the capacity to weather credit cycles. With greater returns come greater risks, and only the most established managers seem poised to navigate these turbulent waters successfully. As credit markets evolve, it will be interesting to see how this growing concentration of power shapes corporate lending in the future. #PrivateCredit #DirectLending #CorporateFinance #CreditMarkets https://lnkd.in/e3qqaV8d

Private credit is enjoying a period of expansion as fund issuance rises in response to investor demand. PitchBook estimates that total assets under management are approximately $1.6 trillion! A key factor is the convergence taking place between private credit and private wealth. The IMpower FundForum private credit roundtable session will feature six leading GPs and two LPs who will discuss this further – Harriet Steel, Amit Bahri, José María Martínez-Sanjuán, CFA, CAIA, Mattis Poetter, Aymeric Martin, Gaetan Aversano, Raman Rajagopal and Dan Robinson. Get all the facts in this article by James Williams and come prepared to expand the discussion with the Q&A part! Read it here 👉http://spr.ly/60445G8e0 #privatecredit #privatewealth #privatemarkets #GPs #LPs

The sustained growth of private credit has been remarkable. Before 2008, it effectively didn’t exist as a distinct asset class. By 2023, total assets weighed in at about $1.6 trillion—roughly the size of the US high-yield bond market. Those assets are expected to hit $2.3 trillion by 2027. That’s a pretty big pool for investors to fish in—and it only applies to corporate credit. Adding other forms of private credit, including commercial real estate, infrastructure, and consumer-oriented specialty finance—makes the opportunity set even larger. Even so, it’s important that investors to pick their spots carefully. High rates will be a burden for some borrowers and may pose additional risks for lenders. #privatecredit #privateassets #privatedebt

🚀 All the Rage in Private Equity: Mortgaging the Fund! 🌐 At this year's Milken Institute Global Conference, net asset value (N.A.V.) loans took center stage. These loans allow firms to quickly raise cash by leveraging the net value of their investments. With $150 billion in N.A.V. facilities on the market and expectations to double, this tool is gaining traction. While N.A.V. loans offer immediate liquidity, they come with significant risks. Complex, multi-layered investment structures can expose vulnerabilities, adding complexity to already leveraged funds. The New York Times highlighted concerns about private equity funds “piling leverage upon leverage,” with no single lender having the full picture. I've seen funds engaging in multiple layers of borrowing, which can increase credit risk and lead to a domino effect if assets are devalued. Ensuring lenders have a clear view of all leverage levels is crucial to managing these risks effectively. 🔍 Read the full story to explore the intricacies and potential pitfalls of N.A.V. loans. #PrivateEquity #Finance #MilkenInstitute #NAVLoans #Investment #Liquidity #FinancialInnovation #RiskManagement #InvestmentStrategy https://lnkd.in/eM-UkmMk

There is a lot of money 💰 floating around among the high net worth investors, looking to park their cash in assets that would generate significant yield. And private credit is definitely one potential asset where they can achieve that yield. But are they sophisticated enough to understand the true risks in these investments as compared to institutional investors in this space. The biggest risk they face is the illiquidity risk and that is what they are getting compensated for in terms of yield. Maybe 🤔 they have so much money 💰, that they really are not too concerned about illiquidity 🤷🏽♂️ #clo #collateralizedloanobligation #cloequity #leveragedloan #middlemarket #bdc #securitization #privatecredit #assetallocation #limitedpartner #privateequity #investment

The private credit market is poised for significant growth heading into 2025, driven by increased M&A activity, lower interest rates, and strategic partnerships such as BlackRock's $12 billion acquisition of HPS Investment Partners, LLC. While optimism surrounds scaled lenders like Golub Capital, challenges such as rising default rates and competitive auctions persist. Abby Latour and Zack Miller | PitchBook https://lnkd.in/e8N7E6jJ #PrivateDebt #PrivateCredit

Our CEO, Nathan Robertson, recently discussed the surge in #privatecredit with Andrew Cornell from Capital Brief. While there's been no shortage of private debt deals this past year, we remain cautious about the quality and risks involved in many of these given the market's rapid expansion. Private debt, driven by the withdrawal of banks from non-core parts of the market and investors' search for #yield, is undeniably a hot topic. With assets expected to nearly double by 2028, it's crucial to recognise that not all deals are equal. Despite the hype, we've been selective in deploying capital, thoroughly vetting each opportunity to ensure it aligns with our capital preservation-first mindset. Josh Derrington, Eddie Barrett, James Duffy, Chris Scarpato, CFA

I'm excited to share insights on transitioning from equity to credit in private markets. Discover challenges, and best practices from industry experts Hoan Nguyen and Tamara Sablic. #PrivateMarkets #CreditInvesting

Private credit has experienced a massive boom, especially post-GFC, filling the gap left by traditional banks. This article by Gresham Partners, LLC dives deep into why they remain cautious about the asset class, despite its growing popularity. While Blackstone has called it a 'golden moment for private credit', Gresham outlines significant concerns such as tax inefficiency, a skewed risk-reward profile, and liquidity issues, all of which might impact investor returns. https://lnkd.in/e5FSb4ZT #PrivateDebt #PrivateCredit