The Credit Edge by Bloomberg Intelligence

TPG Angelo Gordon Predicts Home Equity Borrowing Boom

Nov 27, 2024

TJ Durkin, Head of Structured Credit and Specialty Finance at TPG Angelo Gordon, discusses the booming opportunities in home equity borrowing as homeowners capitalize on rising real estate prices. He predicts a staggering $150 to $200 billion in annual origination, highlighting the shift towards asset-based finance. The conversation touches on the evolution of structured finance, the challenges facing private debt, and emerging trends in commercial real estate and residential solar energy. Durkin emphasizes new strategies and regulatory impacts shaping the future of lending.

47:15

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Episode guests

TJ Durkin

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Episode notes

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Quick takeaways

The surge in home equity borrowing is creating a $150 to $200 billion opportunity for debt investors in a $2 trillion market.

The private credit landscape is evolving as investors increasingly favor asset-backed finance due to challenges faced by traditional banks.

Deep dives

The Boom in Structured Credit Markets

Structured credit markets are experiencing significant growth as declining rates and a thriving economy contribute to increased issuance volumes, particularly in asset-backed securities. The public market spreads have improved, creating a favorable environment for issuance as investors look for alternatives to corporate credit. The expectation is that this trend will continue, with the emergence of new issuers and financial products that capitalize on the current market conditions. As private debt reaches a staggering $1.6 trillion, there is potential for enormous growth in asset-backed finance, highlighting a shift in the financial landscape.

Intro

2min

Navigating Structured Finance and Private Credit

23min

Evolving Interests in Asset-Based Finance

11min

Exploring Opportunities in Private Credit: Equipment and Mortgage Finance

3min

Interest Rates and Business Dynamics

6min

Exploring Leverage and Opportunities in Residential Real Estate Lending

4min

Homeowners cashing out after a surge in real estate prices presents a major opportunity for debt investors, according to TPG Angelo Gordon. “We’re seeing the evolution of home equity products,” said TJ Durkin, the firm’s head of structured credit and specialty finance. “There could be $150 to $200 billion of origination per year, with a $2 trillion really addressable market there,” Durkin tells Bloomberg News’ James Crombie and Carmen Arroyo, and Bloomberg Intelligence senior credit analyst David Havens in the latest Credit Edge podcast. Durkin and Havens also discuss private debt, asset-based finance, commercial real estate, M&A and residential solar energy.

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