Middle Market Growth Conversations A 2025 Lending Outlook with WhiteHorse Capital
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Jan 31, 2025 Stuart Aronson, CEO of WhiteHorse U.S., and Pankaj Gupta, President and global head of originations, dive into the future of lending as we approach 2025. They discuss how interest rates and private equity will influence acquisition activity, highlighting a cautiously optimistic outlook. The duo also analyzes shifts in underwriting standards, potential economic challenges, and emerging credit structures in sponsor vs. non-sponsor markets. Their insights reveal a dynamic landscape with evolving risks and opportunities for investors.
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M&A Market Trends
- 2024 was an aggressive year for lenders, thawing the M&A market.
- Lower interest rates, spreads, and private equity pressure will likely accelerate this trend in 2025.
Renewed Optimism
- CEOs, CFOs, and business owners are expressing renewed optimism about the economic outlook.
- This positive sentiment is expected to further fuel M&A activity in 2025.
Underwriting Standards
- Underwriting standards have relaxed, especially in upper middle-market sponsored transactions, with "diligence light" becoming common.
- Traditional underwriting persists in lower middle market and non-sponsor deals, but overall standards aren't expected to change much in 2025.