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The maturing US private credit market- ushering in a new era
Globally, the private credit market is set to grow to US$2.8 trillion by 2028. In the US, demand for the asset class shows no signs of stopping, with high interest rates, a slowdown in PE deal activity and tighter bank lending bolstering private credit’s appeal. As the direct lending market matures and more consolidation occurs, it is expected that market will continue to expand into new areas, including asset-backed finance structures, more bespoke deals and opportunistic deal activity. Our group of leading managers will discuss the outlook for the year ahead and what to expect in the evolving landscape of private credit.
- What are the key considerations for private credit managers in a challenging and shifting macroeconomic environment?
- Private credit vs banks: will private credit face renewed competition from banks in light of relaxed banking regulations, or will there be more strategic alliances?
- What are the next growth opportunities and capabilities in private credit as managers diversify and expand their platforms beyond LBOs, such as ABFs and BDCs?
- With the continued rise of mega fund activity, will there be increased market consolidation amongst managers? Can niche lenders find a competitive advantage?
Networking break
Opportunistic credit: ready for action
2024 saw increased activity in the opportunistic credit and special situations space, with significant fund closings and fund launches benefiting from high interest rates, as institutional investors look for higher, differentiated returns. It is expected that 2025 will see continued growth in this area as levered borrowers look for refinancing in the higher-rate environment. Our panel of opportunistic credit managers will discuss competitive landscape for the strategy in the next 12 months.
- What factors are propelling the continued growth of opportunistic credit?
- Which sectors and industries are being targeted by opportunistic credit managers?
- How is the opportunistic credit GP landscape evolving, and is it in danger of becoming oversaturated?
- Why are an increasing number of LPs looking beyond direct lending and allocating to opportunistic credit?
Networking lunch
Fund formation: customization and diversification
The rapid growth of private credit has meant that GPs and LPs alike have become more sophisticated. Whilst traditional closed-ended structures still remain attractive to institutional investors, managers are increasingly exploring a wider range of structures and customized strategies to provide investors exposure to the asset class, such as through evergreen or hybrid structures. Meanwhile, sources of capital seeking private credit exposure are broadening, with increased inflows from retail and insurance investors. Our panel of GPs and LPs will assess the competitive landscape and discuss the best strategies to employ.
- Where are the best opportunities, and how are GPs dealing with an increasingly competitive landscape?
- What are GPs doing to entice relatively new investor classes in retail, wealth and insurance?
- What is prompting the increased demand for tailored structures and product offerings?
- What is being offered, such as terms, fee discounts and co investments to get LPs through the door?
Secondaries and the rise of CVs: becoming mainstream
Private credit secondary deal activity has been growing steadily as more asset managers raise capital in the market and LPs search for liquidity options, and it is expected that demand for private credit secondaries will continue to outstrip supply. One such trend has been the emergence of large-scale private credit continuation vehicles in the market in light of volatile public markets, shifting market conditions and the increased need for long-term, stable returns. Our secondaries experts will break down the trends and outlook for this strategy.
- From niche to mainstream: what continues to drive growth in the private credit secondaries market in 2025?
- What are the factors have led to accelerated CV adoption across the private credit market?
- GP-led secondaries and LP-led secondaries: what unique investment opportunities can each of these strategies provide?
- Where do LPs see the best prospects for generating liquidity?
Networking break
The convergence of restructuring and private credit
In line with the rise of private credit, the number of private credit restructurings are also expected to increase. Whilst most private credit restructurings have been completed out-of-court, such as Pluralsight and Alacrity, the recent Chapter 11 filing of Zips Car Wash is the latest example of a company that has had to hand over control of the business to its private credit lenders. As private credit continues to grow and more market participants join, it is expected that more deals may be on the horizon. Our panel of experts and managers will discuss the future of restructurings in the asset class.
- What is driving the growth of private credit restructurings in the market?
- Out-of-court vs in-court bankruptcy- why are some companies filing for Chapter 11 vs out of court deals to hand the keys to lenders?
- What are some considerations direct lenders need to take into account when preparing for private credit restructurings?
- What is the outlook for 2025 and beyond?
Investor and lender insights: looking beyond direct lending
Investors and lenders remain committed to private credit and allocations to direct lending are expected to remain strong in 2025. However, they are increasingly choosing to make larger allocations to fewer managers, opting for large, more established firms. They are also becoming more comfortable with private credit, looking beyond the direct lending space into more niche segments of the market, such as asset-based financing, opportunistic credit and secondaries. Our panel of top investors and lenders will discuss issues that are top of mind during their search for meaningful alpha.
- Why does private credit remain an investable opportunity, and how is the changing landscape of private credit impacting investors?
- What is prompting allocations beyond direct lending, and what are some of the most interesting strategies investors and lenders are looking at?
- Does the middle market remain a compelling space for investors and lenders?
- What are some challenges and risks investors and lenders may face when investing in the asset class, given macro-economic and political uncertainties in 2025?
Networking drinks
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