The Insight by Oaktree Capital
Conversations: The Evolution of Asset-Backed Finance with Armen Panossian, Brendan Beer, and Jennifer Marques
Nov 13, 2024
Join Armen Panossian, Co-CEO and Head of Performing Credit at Oaktree Capital, and Brendan Beer, Co-Portfolio Manager of Structured Credit and Asset-Backed Finance, as they dive into the thrilling world of asset-backed finance (ABF). They explore the shifting dynamics of the current credit markets, analyze how ABF stands apart from corporate lending, and identify promising sectors like aviation finance. The discussion highlights unique investment opportunities and effective strategies for building resilient ABF portfolios in a fluctuating market.
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Quick takeaways
- The asset-backed finance market is evolving due to banks scaling back lending, creating opportunities for non-bank capital providers.
- Current credit market strength is driven by substantial liquidity and a shift in investor appetite towards complex private credit products.
Deep dives
Current State of Credit Markets
The credit markets are currently demonstrating notable strength, aided by substantial liquidity stemming from COVID stimulus measures. Investors, including corporate treasuries and insurance companies, are actively seeking attractive credit returns, leading to a tightening of spreads in both public and private credit sectors. This combination of abundant capital and resilient corporate performance has fueled an evolution in investor appetite, pushing them towards more complex private credit products that offer additional returns and safety. The market sentiment is optimistic, suggesting a robust environment for credit investment despite the lingering concerns regarding inflation and economic performance.
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