Will Baker’s Post

S&P Global Market Intelligence has released its latest report, highlighting the convergence between public and private credit markets, with a focus on the $1.5 trillion private markets' growth and trends expected to continue into 2025. Notably, Gavan Nolan, Executive Director at S&P Global Market Intelligence, emphasized the implications of this trend for credit risk transparency in private funds. https://lnkd.in/d9eEg_dM #PrivateDebt #PrivateCredit

Scenario Analysis: How Could a Credit Crisis Affect Portfolios? Credit risk is multi-pronged, affecting a wide swath of the financial markets directly, and indirectly through its effect on borrowing and security financing. With the recent surge in private credit, this extends even further, and in ways that are difficult to divine. In this article, Rick Bookstaber, Managing Director, MSCI Inc. Research, Thomas Verbraken, Executive Director, MSCI Research, and Dora Pribeli, Senior Associate, MSCI Research, examine a scenario for how a sudden disruption in credit markets could affect portfolios, especially given indications of the market’s fragility.  #creditmarkets #creditcrisis #privatecredit #portfoliostress #financialmarkets https://lnkd.in/d63agrBG

Trustworthy or Flawed? The Role of Credit Rating Agencies in Finance Credit Rating Agencies: Friend or Foe? CRAs rate borrowers' creditworthiness (think letter grades for bonds). They're vital for investors, issuers, and regulators, but limitations exist. Ratings can be slow to react and focus on probability, not certainty. They're a piece of the puzzle, not the whole picture. CRAs are key players, assigning creditworthiness grades (AAA-D) to issuers in the bond market. But are they essential tools or overhyped influencers? Pros: Standardized ratings promote transparency and guide investment decisions. Cons: Short-term focus, potential bias, and procyclicality raise concerns. The Debate: Are CRAs vital, or are there better ways to assess credit risk? Share your thoughts! #finance #creditratings #investing

It's encouraging to see rating agencies offering insights on the growth of private credit. A timely reminder for capital providers and investors to conduct thorough due diligence, ensuring they're comfortable with the associated risks and risk-adjusted returns of offerings. Explore some of these insights on private credit in this article by S&P Global Market Intelligence. Read more: https://lnkd.in/encY8Fhs #PrivateCredit #RiskManagement #InvestmentStrategy

The private credit market has seen substantial growth over the past decade, reaching a total of almost $1 trillion in North America and $500 billion in Europe. However, the floating-rate characteristics of private credit exposes borrowers to increased default risk, whilst interest rates remain higher for longer. Here we've used RiskGauge™, S&P Global Market Intelligence's proprietary credit risk model, to analyze the median 1-year probability of default for private companies in North America and Europe. Read more: https://ow.ly/EeTZ50R8Khr

The private credit market has seen substantial growth over the past decade, reaching a total of almost $1 trillion in North America and $500 billion in Europe. However, the floating-rate characteristics of private credit exposes borrowers to increased default risk, whilst interest rates remain higher for longer. Here we've used RiskGauge™, S&P Global Market Intelligence's proprietary credit risk model, to analyze the median 1-year probability of default for private companies in North America and Europe. Read more: https://ow.ly/EeTZ50R8Khr

The private credit market is swelling so fast its size and growth rate has become something of a debate among experts. But private credit lacks transparency, and firms operating in the sector can almost certainly expect regulators to come knocking.   In this evolving landscape, a robust data strategy isn’t just an advantage — it’s a necessity. GoldenSource’s Jeremy Katzeff, CFA discusses this in more detail in Funds Europe. Read the full piece here: https://bit.ly/40MEV23   #PrivateCredit #DataManagement #Regulation

Discover how the surge in downgrades within the private credit market is signaling increased caution among investors. Read our article here: https://lnkd.in/gjzjBtFD Key Points: - Market turbulence: Rising downgrades in private credit highlight growing concerns about credit quality and economic headwinds. - Investor sentiment: The trend reflects heightened caution as investors reassess risk exposure in a shifting financial landscape. - Resilience strategies: Lenders are adopting stricter due diligence and adjusting portfolios to navigate uncertainties. Share your insights on how private credit can adapt to this evolving market in the comments below. Learn more about how martini.ai can enhance your strategy: https://lnkd.in/grbEbxeu #PrivateCredit #RiskManagement #InvestorSentiment #EconomicTrends #martiniAI

The private credit market's growth trajectory has been nothing short of remarkable, with its AUM ballooning in recent years. This has led to a fundamental debate in the financial community: Are we witnessing a speculative Bubble, or is this sector demonstrating signs of a Mature Market? On one side, there are concerns from prominent financial leaders about the sustainability of such growth, suggesting that the rapid flood of capital could lead to a bubble. They point to the aggressive hunt of yield and the potential for quality to be compromised in the rush to deploy capital. Conversely, there's a compelling argument for the market's maturity. The Financial Stability and Oversight Council and various editorial boards have highlighted the private credit market's contribution to diversifying the credit landscape and supporting economic growth. The direct lending market's relatively modest size and conservative leverage practices suggest a buffer against systemic risks. Moreover, the sector's regulatory oversight and the structural design of non-traded BDCs with redemption restrictions provide additional stability. My take? The private credit market has indeed matured, evolving from a niche segment to a recognized and established asset class. The market's ability to innovate, adapt to investors' needs, and maintain discipline even amidst rapid growth indicates a level of sophistication that goes beyond a transient bubble. While the evidence leans towards a mature market, I acknowledge that differing opinions are what make financial markets dynamic. If you have a different view or additional insights on the state of the private credit market, I'd be interested to hear your perspective. #PrivateCredit #FinancialMarkets #InvestmentAnalysis #MarketDynamics

Dive into our in-depth analysis on private credit's golden moment, where we explore the balance between emerging opportunities and risks in today's market. Full article here: https://lnkd.in/eunMcUhX Key Points: - Opportunity Boom: Private credit is witnessing unprecedented growth, fueled by the retreat of traditional banks and investors’ hunt for yield. - Risk Awareness: While opportunities abound, understanding the underlying risks—especially in a volatile economic environment—is crucial. - Strategic Positioning: Investors are rethinking strategies to navigate this evolving landscape, ensuring both growth and protection against potential market shifts. Share your thoughts on the latest trends in private credit in the comments below. See how martini.ai can enhance your strategy: https://lnkd.in/grbEbxeu #PrivateCredit #FinancialMarkets #InvestmentStrategy #RiskManagement #MarketTrends #martiniAI