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We could be moving into a new cycle for non-performing loans, just as the last one appears close to being resolved.
Commercial property loan originations rose much higher Q/Q (31%) than the average in the second quarter of 2023: the average is just 17%.
Assisted by volatile market conditions, private debt firms have carved out a place for themselves in the mega-financing arena once solidly occupied by the banks.
At our gathering of private debt professionals from the US and elsewhere, participants had a sense of resilience and opportunity – while also acknowledging that tough times may lie ahead.
Policymakers are looking at whether private debt poses a risk to the financial system, while defenders of the industry challenge some of the assumptions being made, says McDermott Will and Emery's Aymen Mahmoud.
Evergreen vehicles are attracting retail investors to private debt, but the big LPs need more convincing, says Barings’ Tyler Gately.
As competition for capital intensifies, private debt managers need to have the scale, flexibility and experience to meet investors’ varying needs and navigate a challenging environment, says Jeff Frank, head of capital solutions & strategy at Twin Brook.
The growth of speciality finance is helping to drive the market.
A second survey has backed up an existing one in identifying a declining private debt default rate. The omens for portfolio company performance are promising.
The downgrades follow from the macro context and vulnerability of certain classes of assets.
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