The Insight by Oaktree Capital
Conversations: The Changing Face of Private Credit at Oaktree Conference 2024
Sep 17, 2024
Explore the fascinating evolution of private credit as a crucial asset class since the financial crisis. Discover insights on the delicate balance of excess capital versus limited deal flow and the recent shift towards retail fundraising. Dive into the intricate dynamics between banks and private credit firms, and examine the surge in asset-backed finance amid changing market conditions. Unearth emerging investment strategies and opportunities, especially in Southern Europe's hospitality sector, highlighting the challenges and rewards in this unique financial landscape.
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Quick takeaways
- Private credit has evolved dramatically, growing from under $250 billion to approximately $1.2 trillion, showcasing its significant market importance.
- The interplay between private credit firms and banks has become increasingly complex, with both competition and collaboration shaping future lending dynamics.
Deep dives
The Growth of Private Credit
Private credit has emerged as a significant asset class, growing from under $250 billion before the global financial crisis to approximately $1.2 trillion today. This rapid expansion is notable in comparison to high-yield bonds and leveraged loans, which have only doubled in the same timeframe. Projections suggest that the US private debt market could nearly double again in the next five years, indicating continued robust growth. The potential for capital doubling reflects strong demand amidst evolving market dynamics and solidifies private credit's position within the broader financial landscape.
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