Streaming Income - A Podcast from Barings

The Blurring Lines Between Public & Private Credit Markets

20 snips

Oct 9, 2024

David Mihalick, Head of Private Assets at Barings with over 20 years in leveraged finance, and Martin Horne, Head of Public Assets, dive into the fascinating convergence of public and private credit markets. They discuss what drives this blurring of lines and its implications for asset managers and investors. The duo explores how economic cycles impact market choices and the benefits of a mixed investment strategy. They also touch on the critical evolution needed for asset managers to keep pace with changing dynamics and investor expectations.

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ANECDOTE

Private Lending's Growth

Private lending exploded during COVID-19 when public markets faltered.
It grew again when interest rates spiked in 2022, demonstrating its adaptability.

INSIGHT

The Untested Waters

Private credit's true test will be its performance during a full economic cycle with losses.
Current market complacency may mask underlying risks due to looser lending standards.

INSIGHT

Benefits of Broad Market Activity

Overlapping analytical capabilities in public and private markets offer valuable insights.
These insights reveal consistencies and inconsistencies that require attention.

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Barings' David Mihalick and Martin Horne discuss the blurring lines between public and private credit markets and the implications for asset managers, borrowers and investors.

Episode Segments:

(03:17) – What’s driving the blurring of lines between public & private credit?

(09:47) – The ebb and flow between the public and private loan markets

(14:22) – What happens when we hit an economic cycle?

(19:17) – The benefits of investing across public & private markets

(23:42) – Why Barings combined its public & private asset-backed groups

(26:10) – How borrowers choose which market to issue into

(33:22) – Thinking about the interplay between public & private markets

(36:30) – How asset managers need to evolve alongside investors and markets

IMPORTANT INFORMATION

Any forecasts in this podcast are based upon Barings’ opinion of the market at the date of preparation and are subject to change without notice, dependent upon many factors. Any prediction, projection or forecast is not necessarily indicative of the future or likely performance. Investment involves risk. The value of any investments and any income generated may go down as well as up and is not guaranteed. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Any examples set forth in this podcast are provided for illustrative purposes only and are not indicative of any future investment results or investments. The composition, size of, and risks associated with an investment may differ substantially from any examples set forth in this podcast. No representation is made that an investment will be profitable or will not incur losses.

Barings is the brand name for the worldwide asset management and associated businesses of Barings LLC and its global affiliates. Barings Securities LLC, Barings (U.K.) Limited, Barings Global Advisers Limited, Barings Australia Pty Ltd, Barings Japan Limited, Barings Real Estate Advisers Europe Finance LLP, BREAE AIFM LLP, Baring Asset Management Limited, Baring International Investment Limited, Baring Fund Managers Limited, Baring International Fund Managers (Ireland) Limited, Baring Asset Management (Asia) Limited, Baring SICE (Taiwan) Limited, Baring Asset Management Switzerland Sarl, and Baring Asset Management Korea Limited each are affiliated financial service companies owned by Barings LLC (each, individually, an “Affiliate”).

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