The Credit Edge by Bloomberg Intelligence Sculptor Sees Opportunity in Busted Capital Structures
Sep 5, 2024
Jimmy Levin, chief investment officer at Sculptor Capital Management, joins Bloomberg contributors James Crombie and Irene Garcia Perez, along with credit analyst Stephane Kovatchev. They discuss striking opportunities in funding companies with unsustainable debt loads, viewing it as the best chance in corporate credit recently. Levin highlights expected growth in asset-based finance and potential double-digit returns. The panel also evaluates the resilience of U.S. consumers and the outlook for debt in cyclical industries amid fluctuating interest rates.
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Current Credit Market
- Credit investors are excited about the current market conditions.
- Returns are in the low double-digits to mid-teens with reasonable risk.
Interest Rate Outlook
- Jimmy Levin suggests that interest rates are likely to normalize over a couple of years.
- He emphasizes the difficulty of predicting short-term rate movements.
Soft Landing and Recession Risk
- The US economy is on a soft landing path with slowing growth and moderating inflation.
- Credit investments should be resilient even with economic fluctuations.