September 2018 issue


    Month: September
    Year: 2018

    Back to Print Editions

    Franchise expansion could be double the trouble

    Private equity firms launching debt arms must act very carefully to avoid conflicts of interest, argues Andrew Hedlund

    Reasons to be worried about mid-market funds

    Despite booming popularity of funds in the segment, Pete Drewienkiewicz of investment consultancy Redington says they can carry hidden risks that investors need to be aware of. By John Bakie

    After the party, the hangover

    The steep fundraising decrease in H1 2018 may just be a function of the incredible amount of capital alternative lenders collected last year. By Andrew Hedlund

    How to cope with growing pains

    Our inaugural CFO/COO event recognised the way operational issues have come to the fore in the asset class. Andrew Hedlund took notes

    Barings on maintaining discipline in a maturing credit cycle

    With competition high and signs of mispricing of some assets, Eric Lloyd of Barings stresses the importance of a global and diversified approach to portfolio construction

    Twenty fundraisers with pulling power

    Who would you want to be working alongside if you had a pool of private debt capital to raise? From that question, we identified some of the industry’s key players you want on your team in our Rainmaker 20.

    Has private debt reached saturation?

    From its compelling risk-adjusted returns to its diverse array of strategies, private debt has a lot to offer. Vivek Mathew, senior managing director and head of asset management and funding at Antares Capital, explains why LPs hunger for more exposure

    As rates go up, so does interest in multi-strategy credit

    With less accommodative and co-ordinated macroeconomic policies taking hold and an increase in geopolitical uncertainties, investors have to think more carefully about their investment choices to maintain returns and reduce volatility. Leland Hart and Vijay Rajguru of Alcentra describe the growing demand for multi-strategy portfolios

    How to take ethics to the next level

    Impact investing is making waves off the back of broad acceptance of ESG principles, but the strategy has a long history and bright future.

    ‘Complex to understand and difficult to put in place’

    Special situations strategies can offer high returns but also involve a lot of spadework. Jaime Prieto of Kartesia explains how such deals can be made to work

    How to ride the ups and downs of the economic cycle

    Investors need to be aware that certain strategies fit the times better than others, but also that fundamentals may be more important than short-term factors. By John Hess of Pavilion Alternatives Group.

    Why CLOs provide a unique access point to the US mid-market

    Protections and flexibility make CLOs an interesting way for investors to tap into the growth engine of the US economy, writes Jeremy VanDerMeid of Monroe Capital

    The ‘snowball effect’ as banks face up to cold climate

    Regulatory actions have boosted Europe’s distressed market, with PE-backed deals in the retail sector also creating interest. David Turner examines the opportunity

    Distressed debt: An expanding opportunity set

    Continued selling by European banks and a possible negative turn in the economic cycle in the US suggest opportunities could be rife. Rich McKinney and Marianna Fassinotti of the D. E. Shaw group discuss various factors driving these developments

    How ABL protects value in a frothy cashflow loan market

    Identifying asset-based lending niches is the way to avoid the excesses of the leveraged loan market, maintain Bruce Spohler and Michael Gross of Solar Capital

    Why China’s online lenders are feeling heat from the regulators

    It’s survival of the fittest for the country’s marketplace specialists, with increased scrutiny designed to improve risk and underwriting standards. Adalla Kim reports

    The lenders who target the loss makers

    A small but active group of venture debt funds can make strong returns from Silicon Valley’s next tech stars. David Spreng of Runway explains why profitability is not a prerequisite

    ‘We had no idea we were doing private debt’

    He tells PDI how a firm viewed as a pioneer of private debt in Central and Eastern Europe came into the asset class almost by accident.

    Distressed debt: An expanding opportunity set

    Continued selling by European banks and a possible negative turn in the economic cycle in the US suggest opportunities could be rife. Rich McKinney and Marianna Fassinotti of the D. E. Shaw group discuss various factors driving these developments

    Apocalypse now as no-deal Brexit looms

    Private debt managers are being forced to consider the consequences of what once seemed unthinkable – the UK crashing out of the EU with no trade agreement.

    Mid-market gives lenders reason for optimism

    The challenges are revenue growth and productivity.

    One strategy accelerates as others hit the brakes

    North American fundraising has been slowing down, but there is fresh momentum for subordinated debt.

    The US mid-market is not too hot, not too cold

    Even at this stage in the cycle, industry experts say conditions in the US private debt market are just right for LPs seeking to fill that sweet spot in their portfolio.

    The lighter side of cannibalism

    More US private fund managers are taking minority stakes in their industry peers and there are benefits for buyer and seller alike.

    6 things we learned about BDCs in 2018

    Favoured for their relative liquidity, versatility and tax efficiency, Business Development Corporations are an increasingly prominent segment of the private debt market. Here are key developments from the past six months.

    AllianceBernstein tells us how to look beyond the numbers

    Capital inflows and new entrants to the market have made investing conditions tougher, but Brent Humphries, president at AB Private Credit Investors – the direct lending platform of global asset manager AllianceBernstein – says opportunities can still be found.

    How managers choose the right tactic

    A sharp increase in market participants in the mid-market is pressuring loan pricing and covenants, so where does value sit in the sector?

    Twin Brook on why it pays to be picky with leverage deals

    In a competitive US private debt market, maintaining discipline can be a challenge. The head of capital markets at Twin Brook Capital Partners explains the value of being selective.

    The US private debt market in four charts

    Last year was a record-breaker for the industry, but there have been warning signs of a downturn.