Majority of private debt firms seeking new business in crisis – survey

Despite the crisis, alternative lenders are keen to secure more business including in senior lending and acquisition finance.

A large majority (86 percent) of private debt lenders are actively seeking new lending opportunities despite the coronavirus pandemic, according to research by law firm Proskauer.

See all Private Debt Investor’s coverage of covid-19 and its impact.

The firm surveyed 100 of its private credit clients to understand the effect of covid-19 on market sentiment and found most fund managers are still open for new business during the crisis.

Almost all lenders surveyed, 97 percent, said they were willing to provide additional capital to existing borrowers.

While distressed investors are expected to be particularly active at present, Proskauer found that 78 percent of respondents are interested in backing non-distressed senior secured loans and refinancings. A further 74 percent are interested in acquisition finance, 48 percent in special situation loans and 30 percent in debtor in possession/exit facilities.

Some industries are suffering a sudden decline in sentiment during the crisis. Manufacturing sentiment is down from 67 percent to 36 percent since Proskauer’s last survey in January. Consumer goods dropped from 43 percent to 30 percent and education providers from 62 percent to 51 percent.

However, other sectors are attracting increased interest, with 94 percent of firms keen to invest in healthcare, 93 percent looking at business services and 92 percent wanting to lend to software and technology companies, all lines of business which have benefitted from coronavirus lockdowns.

Proskaer surveyed 112 investment professionals at alternative lenders between 30 March and 3 April.