The Credit Edge by Bloomberg Intelligence Churchill Sees Mid-Market Loan Value ‘in Plain Sight’
Oct 31, 2024
Randy Schwimmer, vice chairman at Churchill Asset Management, shares his expertise in middle-market lending, touting it as a prime opportunity in credit markets with double-digit yields. He discusses the limited competition among lenders, emphasizing the hidden value in these loans. Additionally, Schwimmer highlights trends in loan margins, the impact of elevated interest rates, and the evolving landscape of private credit, detailing how these factors shape investment strategies and opportunities in a dynamic economic environment.
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Private Credit Evolution
- Randy Schwimmer's career began in the 1980s at J.P. Morgan, lending to mid-market companies.
- This lending segment evolved from a "sleepy business" into the modern private credit market.
Financial Innovation in Credit
- Private credit's rise mirrors innovations like junk bonds and CLOs, augmenting credit availability.
- This evolution offers companies more capital and potentially reshapes the corporate default cycle.
Private Credit Approach
- Unlike public markets, private credit lenders prioritize preserving value and cooperation.
- This approach minimizes the involvement of vulture funds and focuses on long-term growth.