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Deleveraging and newly imposed regulatory restrictions have hindered traditional bank lenders’ activity and in turn restricted the capital available to many segments of the US and global economy.This has created a tremendous opportunity for alternative lenders to step in to fill the void. Attracted by the enhanced yield profile available in the private credit market, “shadow” banking players, such as specialty lenders, hedge funds, BDCs and other private pools of capital have helped to re-introduce market liquidity. Of course, the potential for attractive risk adjusted returns have also driven up the demand for private debt exposure from institutional investors, who are unable to meet objectives in a market that is otherwise devoid of yield. Yet the market for private credit is somewhat opaque and highly fragmented. As result, it is difficult for many market participants to determine optimal entry points.
The evening will begin with a fireside chat between Tod Trabocco, Senior Investment Director and Head of Fixed Income Research at Cambridge Associates and Brett Hickey, CEO and Investment Committee Member at Star Mountain Capital. Mr. Trabocco and Mr. Hickey will have a focused discussion on what investors are seeking to get out of their private credit allocations and how they fit into their overall portfolio.
The second part of the evening will feature a panel discussion of experienced private credit investors, who will provide insight into the breadth of private credit investment opportunities and trends across this unique corner of the capital markets.
The discussion will touch on:
-Size of the market & opportunity
-Segmentation of the market
-Sponsored vs. non-Sponsored lending
-Loan structures: first lien, second lien, “uni-tranch”, mezzanine loans, etc.
-Micro, company specific risks inherent to direct lending
-Economic cycle risks and considerations
-How should private debt be considered within overall portfolio allocation