Breakingviews - Man mixes risk and reward in private credit bet

the fray. However, it may face choppy waters now as high interest rates trigger defaults. That also makes it a good time to buy into the sector, if you can find the right manager. Varagon, which specialises in mid-market buyouts, has a strong record: its loans have suffered an annualised default rate of just 0.05% since 2014, versus the 1.6% average in the Cliffwater Direct Lending Index.

One wrinkle: over half of Varagon’s client commitments come from just three insurers including AIG who were its owners and are now selling out. They will be rewarded with further payments if they extend their commitments, and Man hopes to use its network to broaden Varagon’s investor base. Overall, after factoring in Varagon’s management’s 23% stake, the deal values the whole group at $250 million, equivalent to about 2% of Varagon’s nearly $12 billion of assets under management.

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Breakingviews - Europe's biggest IPO prudently tests the waterEurope’s biggest listing this year is off to a cautious start. Hidroelectrica, Romania’s top hydropower producer, priced on Wednesday its initial public offering (IPO) at 104 lei ($22.87 per share, the middle of a proposed range, raising 1.8 billion euros. That values the whole utility at 46.8 billion lei, or 9.4 billion euros. It also suggests the company would trade at 10.5 times its 2022 earnings per share, a multiple 30% lower than the 14.8 times Austrian peer Verbund is currently trading at.
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