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Bloomberg on “Private Credit Funds With No Skin in the Game”
With the growth of private credit has come more circularity in the lending market between private credit (“shadow lenders’) and traditional borrowers. This article generalizes these risks across private credit. While reading it, be sure to remember to consider the distinction between the sponsor-backed direct lending market and other strategies within private credit.
Apollo Releases Mid-year Private Equity Outlook
Apollo’s mid-year private equity outlook includes multiple insights and points of advice for private equity investors:
- Interest rates will remain higher for longer due to strong near-term growth, deglobalization, the energy transition, increased defense spending, rising Treasury issuance, and US fiscal deficits.
- With rates higher for longer and growth eventually slowing down, opportunities in private equity will likely continue to emerge among potential distressed companies.
- Ongoing uncertainty and volatility in the broader market call for a flexible, value-oriented strategy in private equity. Strategies with the ability to invest opportunistically across the capital stack are well-positioned to capitalize on the shifting fortunes of companies seeking financing in these turbulent times.
BlackRock Will Acquire Preqin
Private market investors and service providers continue to believe in the importance of data and access to information to help with decision-making, sourcing, and reporting. BlackRock’s planned acquisition of Preqin for $3.22 billion is just another example.
Is Private Credit “Running out of Space for the Little Guy”?
Fundraising has been tough recently for smaller managers. Anecdotally, it appears that one contributing factor is the fact that the biggest investors, LPs, have stayed in the market during the chaos of the last couple of years. These groups favor scale and typically deploy north of $100M into a fund. The result is that small managers are forced into raising funds via other channels, namely RIAs and Family Offices. However, we believe the demand for smaller managers will shift as more investors come into the market and recognize the return potential and diversification benefits of some of these smaller groups. This article represents Bloomberg’s view of the situation.