Private credit has become a popular asset class among pension plan sponsors seeking yield enhancement over their public fixed income allocations. The non-bank finance market has flourished since the Global Financial Crisis due to a more restrictive bank regulatory environment, resulting in reduced bank lending activity, and a wide range of private credit opportunities are […]
July 2023
Families of significant wealth can experience sustained periods of time where liquidity is not a foremost priority. Demands for liquid capital can rapidly emerge, however, like the sudden onset of the COVID-19 crisis in March 2020, and cause trouble for the unprepared. In the worst-case scenario, investors may need to sell growth-focused assets during a […]
July 2023
A robust opportunity set for credit opportunity funds has emerged thanks to a constellation of factors. Rising interest rates, a retrenchment of bank lending appetite, and an expected economic downturn have combined to increase borrowing costs for stressed issuers and create a broad distressed opportunity. Investors that commit capital to funds this vintage year are […]
June 2023
We believe now is an opportune time to allocate to direct lending. Dislocation in the public leveraged finance markets has allowed direct lenders to increase credit spreads and tighten terms. This, coupled with higher interest rates, means that first-lien senior-secured debt is now yielding low double digits. Recent turmoil in the banking sector may only […]
March 2023
On 20 March, investors awoke to news Swiss authorities had used emergency measures to push through a hastily arranged merger of Credit Suisse and UBS. Following two recent bank failures in the United States, the announcement raised questions over the health of European banks and the broader economy. While market pressure on another European financial […]
March 2023
Yes. Markets will be less vulnerable to rising rate risk next year, as the aggressive tightening that has weighed on markets for much of 2022 has moderated more recently since inflation has slowed. However, we see a pause in tightening as more likely than a pivot to easing in 2023 because inflation will be slow […]
December 2022
We expect interest rates will increase in many developed markets, as implied by market pricing. But we think the Fed will hold rates in restrictive territory for longer than expected. We don’t believe any increases will prompt another European sovereign debt crisis. US Federal Reserve Pauses, but Does Not Pivot in 2023 Celia Dallas, Chief […]
December 2022
We expect most liquid credits will generate higher returns in 2023 relative to 2022, given the better yields on offer. We also see private credit as offering opportunities, particularly in secondary trading. Liquid Credit Markets Should Generate Higher Returns in 2023 Wade O’Brien, Managing Director, Capital Markets Research Many high-yield (HY) borrowers are prepared for […]
December 2022