Breakfast and registration
Chair’s opening remarks
Keynote fireside chat
Opening panel: Current state of the US private credit market-filling the public void
According to reports, the private credit market as of 2022 has grown to USD1.4 trillion AUM and it is expected to increase to USD2.3 trillion by 2027. These statistics sit against a backdrop of rising interest rates, inflationary pressures, and a looming recession in the US, where an effective shut-off of the syndicated loan market has meant that private credit managers are increasingly being asked to finance large buyouts. For lenders with dry powder, this should present an opportunity of higher returns as well as the ability to negotiate more favourable terms with borrowers. However, concerns around long-term financial strain remain. Our panel of leading private credit managers and experts will discuss their views on the market and offer insights on how to best navigate the choppy waters ahead.
- What are fund managers doing to prepare for continued uncertainties and market dislocations?
- How has the fundraising market shaped up in the past year, and where are funding sources coming from?
- The transition from public to private lending – how are direct lenders capitalising on this, and what changes do they expect in the next few months?
- Which recession-resistant sectors are private credit managers favouring, and what is the outlook for the year ahead?
Opportunistic credit: distressed debt and special situations- a strategy for volatile times
The current dislocation of the economy and heightened global inflation could arguably be setting the scene for a distressed cycle, with current market conditions favouring opportunistic strategies as corporate borrowers face heavy debt loads and financial distress. Having an opportunistic credit strategy means that managers can build portfolios with good downside protection, and with more firms raising and closing funds targeting distressed debt and special situations, activity in this sector seems to be poised for an uptick. Our panel of fund managers will assess the opportunity set.
- How are continued market dislocations creating more distressed debt and special situation opportunities? What has changed compared to a year ago?
- How can managers best take advantage of the upcoming distressed cycle?
- What are some of the sectors and more unique strategies that opportunistic investors are looking at?
- What is the outlook for the year ahead?
CLOs under pressure
The outlook for the US CLO market remains rocky at the beginning of 2023, with ongoing headwinds impacting CLO formation and performance, a rising level of low-rated CLO assets in 2022, and a risk of credit rating downgrades. Despite this, industry experts have remarked that mid-market deals and broadly syndicated CLO activity remains. Given these conditions, our panel of CLO managers will discuss the resilience of the sector and what they have been doing to navigate the current market dislocations.
- Given the current market downturn and deteriorating credit conditions, what will the long-term impact be for CLOs?
- How has CLO formation fared in the past 12 months? Are we seeing opportunities for new CLO formation given the current rate environment?
- How are CLO managers reacting to the current downturn, and what strategies have they employed? Will we see increased consolidation?
- Which segments of the CLO market are defying the odds?
Sector focus: Software and technology – risks and rewards
In the past year, the technology and software sector has captured the attention of private credit lenders who sought to finance deals in the industry despite market volatility, as evidenced by several take-privates funded with private debt and a rise in popularity in ARR loans for growth-stage companies. However, given the current state of the economy, it is likely that lenders will pause to take stock and become more selective and disciplined in their investments. Our panel of technology and software private credit lenders and industry experts will discuss their views on the market and identify opportunities on the horizon.
- How has the technology and software lending market developed in the past 12 months, and how has the drop-off in tech valuations impacted the private credit market?
- Will the appetite for software deals among private credit firms remain as buoyant as before, and is the competition still as strong?
- Where are the greatest opportunities for returns in this sector?
- ARR lending – what promoted the growth of the recurring revenue financing market, and will this lending model remain popular?
Panel- Institutional investor insights- allocator perspectives
The recent state of the public markets has meant that institutional investors’ overall asset allocation pie has shrunk. Despite this, private credit remains an attractive source of investment for LPs, amounting to over USD100 billion in pension fund investments. Indeed, a public market retreat has meant that pensions now have more flexibility to add more illiquid debt into their portfolios, and there seems to be no pause in activity for this asset class. Our panel of top LPs will discuss their private credit allocations, key considerations, and their outlook for the year ahead.
- What continues to make private credit a compelling investment opportunity for LPs, especially given the current macroeconomic and geopolitical landscape?
- What are some of the investment trends investors are leaning towards in this climate, such as expanding into new geographic locations and focusing on non-cyclical businesses?
- Despite market optimism, what are some of the ongoing challenges LPs face when investing in the space?
- What are some unique opportunities LPs see on the horizon, and what are allocators’ plans for the year ahead?
End of conference and networking drinks
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