A business may appear to be robust, but a savvy lender that is responsible for the capital of its investors needs to be constantly across the mountain of variables that can present themselves.
For non-bank corporate lenders that don’t have the regulatory oversight that banks do, using third party validation for loan books is essential according to Epsilon Direct Lending’s Joe Millward.
As the private credit market grows, so does the importance of due diligence when selecting an investment partner. Epsilon’s Joe Millward details the five things all potential investors should look out for.
Senior secured loans recover strongly from economic downturns and plenty of corporates are well prepared for any ructions ahead. Still, active management matters when it comes to selecting new deals.
There’s still ample opportunity for loans generate higher than historical average returns, with Invesco expecting outperformance over the next 6-12 months. And with a recession potentially on the horizon they come with downside protection included.
Commentators warn that a new default cycle will strip the shine from private debt strategies, but not all managers have been “sitting on their hands”. And the dislocation in commercial real estate is creating new opportunities for savvy managers.
The mid-market private manager’s co-founding partner, Mick Wright-Smith, expounds on the biggest red flag borrowers can wave, as well as the lending advice he’d like to give to his younger self.
The proliferation of private credit providers in recent years is a boon for investors, explains Andrew Ash from Mason Stevens. But the attraction of diversification and returns comes with several caveats that investors should consider.
Private lending is going mainstream as soaring inflation forces mid-market businesses to consider more flexible funding options than the traditional incumbent sources.
With private equity becoming more accessible, retail investors can now take advantage of the asymmetry-of-information and diversification benefits PE offers, while its safe-haven characteristics stand out in the uncertain macro environment, according to David Chan and Cameron Brownjohn.