The Insight by Oaktree Capital Off The Beaten Path
17 snips
Apr 8, 2025 
In this discussion, Matt Wilson, Co-Portfolio Manager in Special Situations, Christina Lee, Co-Portfolio Manager for U.S. Private Debt, and Jennifer Marques, Head of Strategy and Structuring in Asset-Backed Finance, dive into the impact of rising interest rates on private equity and the growing demand for junior capital. They explore innovative strategies in structured equity and the evolving dynamics of capital markets. The conversation highlights the importance of understanding asset-backed finance risks and the changing landscape for private lenders.
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Interest Rates and Private Equity
- Higher interest rates negatively impact private equity, but create buying opportunities.
- Elevated debt burdens make good companies with bad balance sheets attractive targets.
Good Companies, Bad Balance Sheets
- Many good companies acquired during low interest rates now face high leverage due to increased borrowing.
- These companies, burdened by debt but fundamentally sound, present unique investment prospects.
Structured Equity Solutions
- Structured equity offers downside protection with fixed income and equity participation.
- Board representation is essential in structured equity deals to influence strategic decisions.