It has long been noted within the industry that private debt has enjoyed strong tailwinds since the global financial crisis. A relatively young asset class has been able to build strong investor support, at least partly on the back of benign conditions for raising capital and making investments. The covid pandemic provided a brief challenge, and firms were able to successfully move on more swiftly than many expected.
Now, amid rising interest rates, private debt finds itself in a new environment. In this third installment of our five-part podcast miniseries Private Markets and the End of Cheap Money, we speak to those on the front line about both the challenges and opportunities for private debt as we head into 2023.
Andy Thomson, senior editor of affiliate title Private Debt Investor, and Robin Blumenthal, Americas editor of PDI, discovered much optimism as the banks once again pull back from lending activities – widening the space for private debt to move into. They were also told of the difficulties borrowers are likely to face as rising rates put pressure on their ability to service debt. It’s a mixed picture as the asset class heads into a new year.
Featured in this episode: Anthony Fobel, chief executive of Arcmont Asset Management; Dominik Spanier, managing director and head of debt advisory in Germany at Lincoln International; Adam Wheeler, co-head of global private finance at Barings; Milwood Hobbs Jr, managing director and head of North American sourcing and origination at Oaktree; Michelle Handy, a managing director and the head of portfolio and underwriting on First Eagle Alternative Credit’s Direct Lending platform; Randy Schwimmer, senior managing director and co-head of senior lending at Churchill Asset Management; and Jason Strife, who works with Schwimmer at Churchill and is head of the firm’s junior capital and private equity solutions business.