In this roundtable, Ian Fowler and other industry experts discuss private credit’s bounce back and the frenzied deal-making environment of late.
Barely 18 months after the US economy seemed to be imploding, market conditions have rebounded spectacularly. Six leaders in the private debt industry spoke to Robin Blumenthal about the bounce back and the frenzied deal-making environment.
When we held our US private debt roundtable a year ago, the participants were cautiously optimistic that the asset class would weather the storm of covid-19. But no one could have predicted the strength of the recovery and the extent to which, 12 months on, they would be worrying about the risks of the market over-heating.
The US economy has already wiped out its pandemic losses, helped on by the $1.9 trillion stimulus passed in March and the prospect of at least another trillion dollars in infrastructure spending on the horizon. Inflation, now at its highest levels since just before the 2008 financial crisis, has become the major macroeconomic concern in the US.
Private Debt Investor spoke to six key players in the US private debt market about the realities of operating in such turbulent times. Our panel agreed that the resilience of the asset class during covid has demonstrated its maturity and underlined its value to investors. Allocations to private debt are set to continue to grow – but growth is bringing its own problems. With competition for deals increasingly intense, managers are pushed to accept looser terms. And in such a frantic environment, well-established players that can afford to be highly selective in pursuing opportunities, enjoy a critical advantage.