In the Market: Financiers fret over 'leverage on leverage' in private credit

May 11 - To some elite financiers who gathered in Los Angeles for the Milken Institute conference, a debt binge in private markets is reminding them of the go-go days of risk-taking before the 2008 financial crisis.

In many cases, the money is being raised to pay investors in these funds, such as pensions and endowments, dividends to meet demands for payouts, the financiers said. That also enables the fund managers to ask investors for new money, generating more fee income. In some cases, the money is being used to prop up struggling portfolio companies or to invest in them for growth, and to fund new acquisitions.

Private credit has grown exponentially over the past few years, as banks pulled back their balance sheets due to tighter regulations. Major fund managers such as Oaktree Capital Management, Apollo Global Management , opens new tab and Ares Management , opens new tab as well as Wall Street banks such as Goldman Sachs , opens new tab and Morgan Stanley , opens new tab are active in the market.

One said while their firm would write large checks running into hundreds of millions of dollars, they spent time properly underwriting the loan and wrote in protections. For example, in their dealings with the most sophisticated private equity firms they would build in protections that prevent the borrower from removing assets from the pool of collateral for the loan or stop them from incurring more debt.

While several financiers said their investors were pressing private equity firms to take on loans to pay them dividends, leaving them with no choice, Christopher Ailman, the outgoing chief investment officer of the $336 billion California State Teachers’ Retirement System, said he"would rather see them not add leverage."

المملكة العربية السعودية أحدث الأخبار, المملكة العربية السعودية عناوين

Similar News:يمكنك أيضًا قراءة قصص إخبارية مشابهة لهذه التي قمنا بجمعها من مصادر إخبارية أخرى.

In the Market: Financiers fret over 'leverage on leverage' in private creditExplore stories from Atlantic Canada.
مصدر: SaltWire Network - 🏆 45. / 63 اقرأ أكثر »

In the Market: Economic surprises are messing with the market's favorite recession predictorExplore stories from Atlantic Canada.
مصدر: SaltWire Network - 🏆 45. / 63 اقرأ أكثر »

In the Market: Economic surprises are messing with the market's favorite recession predictorA bond market anomaly that has reliably predicted a U.S. recession in the past may normalize this year in a highly unusual manner. The market signal, called...
مصدر: YahooFinanceCA - 🏆 47. / 63 اقرأ أكثر »

Stock market today: Japan’s Nikkei leads Asian market retreat as Middle East tensions flareHONG KONG (AP) — Asian stocks tumbled Friday, with Japan’s Nikkei slumping 2.4% on heavy selling of semiconductor-related shares and other market...
مصدر: YahooFinanceCA - 🏆 47. / 63 اقرأ أكثر »

Gold market analysis for May 13 - key intra-day price entry levels for active tradersThe Kitco News Team brings you the latest news, videos, analysis and opinions regarding Precious Metals, Crypto, Mining, World Markets and Global Economy.
مصدر: KitcoNewsNOW - 🏆 13. / 78 اقرأ أكثر »

Stocks to play Canada’s ‘strong catch-up trade in the coming quarters’ according to BMO chief strategistDaily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
مصدر: globeandmail - 🏆 5. / 92 اقرأ أكثر »