Spotlight: A PEI Podcast
A golden era for opportunistic lending
Dec 17, 2024
Jimmy Levin, Chief Investment Officer of Sculptor Capital, oversees over $20 billion in credit assets. He shares insights on the unique opportunities presented by recent market volatility and rising interest rates, reshaping traditional credit strategies. The conversation dives into the resurgence of asset-based finance and its implications, particularly in real estate. Levin also discusses the differences in opportunistic lending between the U.S. and Europe, emphasizing evolving frameworks. A forward-looking market outlook offers tantalizing prospects for credit investors.
24:54
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Quick takeaways
- The recent volatility in credit markets presents unique opportunities for opportunistic credit investors to secure attractive risk-adjusted returns by identifying overlooked assets.
- Asset-based finance has gained prominence as a favorable investment strategy, capitalizing on tangible assets amidst changing borrower behaviors and evolving credit cycles.
Deep dives
Opportunistic Credit in Volatile Markets
Recent volatility and uncertainty in debt markets, driven by rising inflation and high interest rates, have created unique opportunities for opportunistic credit investors. These investors leverage market dislocations to find underappreciated assets that allow for potential excess returns without taking on disproportionate risk. For instance, firms like Sculptor Capital Management employ a broad understanding of various credit segments to identify investments that the general market might overlook. This strategy enables them to provide credit to companies and real estate borrowers who are struggling to access capital, all while benefiting from more favorable pricing and terms due to the current market conditions.
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