FICC Focus KKR’s Pietrzak on Private Credit Scale, Value: Credit Crunch
8 snips
Dec 13, 2024 Daniel Pietrzak, KKR partner and global head of private credit, shares his extensive knowledge on the booming $2 trillion private credit market. He explores the surge of investment-grade players entering private credit and its implications for asset allocation. The conversation delves into the strategic capital deployment in Asia, particularly India, and highlights the current risk environment shaped by geopolitical dynamics. Pietrzak also emphasizes the importance of disciplined underwriting and collaborative risk management in navigating this evolving landscape.
AI Snips
Chapters
Transcript
Episode notes
Private Credit Definition and Size
- Private credit involves privately originated and negotiated deals, encompassing direct lending and asset-based finance.
- It's a growing market, approaching $2 trillion for direct lending and $5 trillion for asset-based finance.
IG Companies in Private Credit
- Investment grade (IG) companies are increasingly using private credit for funding, seeking higher returns and strategic partnerships.
- This allows them to fund projects like capital expenditures or factory build-outs while keeping their balance sheets light.
Private Credit Market Growth
- The private credit market has grown significantly, driven by increased investor demand and the appeal of higher yields.
- Market volatility and a pickup in M&A activity are expected to further fuel this growth.