Sponsored

Infrastructure debt managers are well positioned to navigate macro challenges, argues Augustin Segard, head of junior infrastructure debt at Schroders Capital.

A volatile macroeconomic environment presents both risks and opportunities for private debt – but five influential figures in the US private debt industry tell us that the asset class remains on a growth trajectory.

An over-reliance on upper mid-market deals may leave some platforms exposed as liquidity dries up, warns Barings’ Ian Fowler.

Volatile markets create opportunities for direct lenders that are appropriately funded and flexible, says Brent Humphries, president of AB Private Credit Investors.

In a dislocated market, there is a wider band of relative value and more opportunity to optimise risk-adjusted return through selectivity, says Northleaf’s David Ross.

With predictions of a choppy period ahead in the macro environment, direct lenders in the mid-market stand to benefit if they remain reliable partners to borrowers and PE sponsors, says Trevor Clark, founder and managing partner at Twin Brook Capital Partners.

Managers that offer options in both syndicated and private credit markets can capitalise in volatile markets, says Kevin Lawi, private credit portfolio manager and head of origination for Credit Suisse Asset Management’s Credit Investments Group.

A private junior debt strategy offers higher yields than fixed income vehicles and lower risk than equity investments, says KKR’s Michael Small.

Managers who continue to work constructively with their underlying portfolio and are increasingly selective on new investments will emerge from this latest challenge strong, says Keith Miller, global head of private debt at Sanne, an Apex Group company.

Direct lenders need to be strategic about higher default rates, according to William Brady, Kris Hansen and Jennifer Yount, partners at global law firm Paul Hastings.