The private credit market is offering a lifeline for businesses and strong returns for investors, according to a new report.
The American Investment Council says that small and middle market businesses are increasingly leveraging private credit for M&A transactions without private equity sponsors and are outpacing the broadly syndicated loan market. For businesses unable to secure traditional bank lending at all or of the size required, private credit is providing another route.
“Private credit is playing a crucial role in supporting businesses and delivering impressive returns for investors, especially in uncertain times,” said Drew Maloney, President & CEO of the American Investment Council. “The industry’s resilience and flexibility are filling market gaps and providing customized financing solutions. Private credit has become indispensable for businesses seeking financing and is increasingly becoming their preferred option.”
The AIC report, using Pitchbook data, says North American private credit vintages from 2017 and 2018 are showing distributed/paid-in multiples exceeding 0.5x, that is they have already distributed half their total value to investors. In 2022, private credit funds had an internal rate of return of 7.59% compared to a return of -3.24% for the Morningstar US high yield index.
The AIC’s research suggests that growth will continue with investors committing almost $1.3 trillion over the past decade including almost $138 billion in 2023 alone. Funds have almost $341 billion of dry powder available to lend currently.
But as popular as private market investments are, particularly in the institutional space, nobody should expect them to become a staple fixture in people’s retirement plans anytime soon, according to new research from Cerulli.
Nine-month electronic trading freeze and share lending program at the center of dismissed claim.
Meanwhile, Rossby Financial's leadership buildout rolls on with a new COO appointment as Balefire Wealth welcomes a distinguished retirement specialist to its national network.
With a smaller group of companies driving stock market performance, advisors must work more intentionally to manage concentration risks within client portfolios.
Professional athletes are often targets of scam artists and are particularly vulnerable to fraud.
The brokerage giant tells Wall Street it will use artificial intelligence to reach clients it has never been able to serve — and turn the technology's perceived threat into a competitive edge.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
