Albert Jalso, CFA, CPA’s Post

The private credit market is experiencing significant shifts, with declining yields benefiting companies through improved borrowers' coverage ratios and easing liquidity pressures. Increased competition between private and public markets is tightening pricing spreads, while loosening documentation trends raise questions about credit quality. S&P Global Ratings https://lnkd.in/dEsChPnR #PrivateDebt #PrivateCredit

What's Next for Private Credit? 🏦 In the past, obtaining a loan meant dealing with banks and payday lenders. Today, private credit has revolutionized the landscape, offering efficient capital channels and attractive returns. This sector's rapid growth has been driven by changes in traditional bank lending practices and the increasing role of asset managers. However, the lack of regulation and transparency in private credit raises significant concerns about potential risks, particularly during economic stress. Despite these challenges, I see a promising future for private credit. With increased oversight, this sector can balance innovation and regulation, contributing to a more resilient financial system. As private credit continues to expand globally, especially in Europe and Asia, staying informed and vigilant will be key to navigating its complexities. This dynamic sector is poised to play a pivotal role in global finance, and its evolution will be fascinating to watch. #PrivateCredit #Finance #Investing #FutureFinance #FinancialInnovation https://lnkd.in/gssipgxg

Private credit is looking to catch the next wave of growth — in asset-based lending. In part, that is to sustain the sector’s extraordinary growth and to satisfy the sea change in allocations to credit. But firms are also jumping in because leveraged lending has become more crowded. Very interesting report from my colleagues Huw van Steenis Dylan Walsh Julian Gorski Laura Watkin Francesca Owen Some insights - In 2023, these non-bank lenders funded a whopping 86% of leveraged loans, up from 61% in 2019 - Our new estimates suggest specialty finance is a $5.5 trillion asset opportunity in the United States alone, where private credit today has less than a 5% share - Most interesting segments for growth within specialty finance are in hard asset finance and consumer finance - Whereas Private Credit 1.0 has been dominated by bypassing banks an direct origination, Private Credit 2.0 will be much more about partnerships between banks and private credit firms - 10 new partnerships announced in last 12 months alone! #OWfinancialservices #privatecredit https://lnkd.in/eSAssPXj

Exploring the evolving landscape of private credit is crucial for today's investors. We believe in the strong potential of private credit, particularly the strength behind direct lending. Platforms like Percent are at the forefront, offering access, diversification, and transparency in this dynamic sector. Read more about the four reasons to consider private credit in this insightful article from J.P. Morgan Private Bank. 1. Direct lending yields still stand out 2. Loan growth appears to be healthy, not bubble-esque 3. Underwriting standards and fundamentals are solid 4. Defaults may rise further but investors may be well compensated for the risk Read more at: https://lnkd.in/gm9mVB-r #PrivateCredit #Finance #Investing #Percent

The expanding footprint of private credit—and the associated migration of trillions of dollars of assets from bank to nonbank balance sheets—represents a significant opportunity for industry participants. While we believe that private credit is here to stay, careful monitoring of short-term risks is still necessary, particularly in the event of an economic downturn in which a range of loans may become stressed or distressed. As the market grows, the regulatory paradigm in the industry will also evolve. The insights outlined in this article can help players succeed in this new private credit ecosystem.

A really great piece published by the team at GCI (Global Credit Investments). Traditional banks often fall short when it comes to understanding the dynamic circumstances of high-growth businesses. Their appetite is often dictated by rigid parameters, leading to a narrowing mould that lacks the flexibility and adaptability to accommodate the unique needs of these businesses. The most optimal financing solution isn't always found (or available) within the confines of a bank. And a business deemed 'un-bankable', certainly doesn't make it unworkable... Now, more than ever, non-bank lenders must play a crucial role in filling this void, providing tailored financing support to empower businesses to achieve new heights. https://lnkd.in/gztE-TmE

In this insightful article from Bloomberg, authors Abhinav Ramnarayan and Kat Hidalgo delve into the significant shifts seen in private debt sectors, where major firms like Fortress Investment Group and KKR are now focusing on consumer loans. Despite the allure of these new ventures, the authors point out increasing risks due to higher unemployment rates and consumer debt delinquencies. This compelling read offers a detailed perspective on the evolving landscape of private credit amid economic uncertainties, shedding light on the nuanced strategies employed by top firms to leverage opportunities in consumer finance. https://lnkd.in/eDZDmXqQ #PrivateDebt #PrivateCredit

Can Private Credit help investors cope? Defined by higher inflation and lower real growth, the global macro environment is changing. Nothing moves in the same direction forever, but when it comes to private credit opportunities, we think there’s a strong secular case to be made for more growth. In the years ahead, generating the returns necessary to stay ahead of inflation will become more challenging. We believe that will raise the value of the illiquidity premium associated with many forms of private credit and the inflation hedge that many floating-rate structures provide. My colleague Matthew Bass, Head of Private Alternatives wrote this Mid-Year Outlook. He provides insights in to Direct Lending and navigating the risks. Reach out to me directly if your interested in discussing further. Mathew and I are more than happy to hop on a call and discuss in more detail. #uhnw #familyoffice #privatecredit #multigenerationalwealth #wealthplanning

The private credit market has surged from $250B in 2010 to an astounding $2T (yes, that’s Trillion) today. Discover how this growth is reshaping the financial landscape in our latest article 👉 https://lnkd.in/dPVmTCp5 After the 2008 financial crisis, big banks retreated from riskier lending due to stricter regulations. This gap has been increasingly filled by private credit, driving its popularity and growth. Private credit offers direct lending and one-to-one relationships, differing from traditional loans funded by bank deposits. This structure can provide more personalised and flexible financing solutions. The shift to private credit is partly driven by floating interest rates, which protect lenders during rate hikes. However, this can also strain borrowers, especially during economic downturns. Transparency and governance in private credit are crucial. Sometimes weak underwriting standards and murky transparency can pose risks, highlighting the need for stringent management and clear investment processes. Despite concerns, private credit remains resilient. Regulatory compliance and secure funding models enhance its stability, making it a valuable alternative investment. As private credit continues to grow, it is important to understand its benefits and risks. Our latest article provides an in-depth look at how this market is evolving. Read more here https://lnkd.in/dPVmTCp5

Private credit is filling the lending void left by traditional banks in a post-GFC world. Craig Brooke of KeyInvest explores how this asset class is evolving and its significance for the Australian market. https://lnkd.in/gCQtbvd7 #PrivateDebt #PrivateCredit