Exchanges The Boom in Private Credit
Jul 12, 2022
Lotfi Karoui, chief credit strategist at Goldman Sachs Research, and James Reynolds, global co-head of Private Credit at Goldman Sachs Asset Management, delve into the booming sector of private credit. They highlight how money managers are stepping in as lenders, especially during market disruptions. The duo discusses the advantages of direct lending versus traditional bank loans, the impact of rising interest rates and inflation, and the importance of transparency and regulation in this evolving market. It's a must-listen for anyone intrigued by private finance.
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Direct Lending Benefits
- Private credit involves direct lending, cutting out intermediary banks.
- This allows for bespoke financing, flexible terms, and stronger borrower-lender relationships.
Investor Base Expansion
- Private credit's investor base has expanded beyond institutional investors.
- Improved track record, returns, and accessibility via retail vehicles drive this growth.
Private Credit Market Size
- The private credit market, at $1.2 trillion, rivals high-yield and leveraged loan markets.
- This makes it a significant asset class for fixed-income investors.