Rising calls for for liquidity are set to gasoline a growth in secondary market exercise within the personal credit score house, in line with JP Morgan Asset Administration.
Andrew Carter, who oversees JP Morgan’s credit score secondaries technique, instructed Bloomberg that he expects greater than $30bn (£23.5bn) of personal credit score to alter palms within the secondary market this 12 months, up from simply $3bn in 2019.
Learn extra: Ares set to shut largest ever direct lending fund
“At the moment, deal move is once more being pushed by liquidity wants given the slowdown in money flows created by debt repayments, which has resulted from decreased M&A and capital markets exercise,” Carter was cited as saying within the Bloomberg report.
He added that deal sizes have grown to a mean of round $200m from $25m.
Learn extra: What’s the true measurement of the personal credit score market?
Restricted companions equivalent to insurers and pension funds have been trying to offload a few of their positions in illiquid property to lift money, which has boosted secondary market exercise.
Non-public credit score property are usually purchased as long-term investments however among the largest corporations within the house together with Apollo, Ares Administration and Tikehau Capital have raised funds to purchase these stakes within the secondary market.
Learn extra: Apollo targets $2bn for credit score secondaries fund