Man Group’s credit score enterprise is in talks about creating constructions that attempt to steadiness liquidity extra between managers and buyers.
On the funding agency’s 2024 credit score outlook, Eric Burl, head of discretionary, famous that many consumers are lowering their publicity to property resembling non-public fairness in favour of fastened earnings.
Whereas he highlighted that a majority of these institutional buyers “perceive illiquidity”, he added that Man Group is speaking about “a lot of illiquid constructions” that attempt to steadiness liquidity extra between managers and buyers.
Learn extra: When it rains, it pours: Liquidity particular report
The important thing factor is avoiding a liquidity mismatch, Burl stated.
“You’ll be able to’t faux one thing is liquid which isn’t and you’ll’t promote it as such,” he added.
Mike Scott, international head of excessive yield and credit score alternatives at Man GLG, stated on the occasion that he sees “constant demand for every day liquidity”, in addition to demand for property resembling distressed debt “which are typically locked up for an extended time frame”.
Scott expects to see development in demand for distressed debt this yr.
Learn extra: Abrdn sees “sturdy” demand for personal credit score
“We’re shifting into the a part of the cycle the place there’s a dislocation and borrower delinquencies have a tendency to extend,” he added.
Man Group acquired a controlling stake in US credit score agency Varagon final yr for $11.7bn (£9.1bn) to increase its presence within the non-public credit score market.
Walter Owens, chief government of Man Varagon stated on the occasion that it’s a nice time to put money into the non-public credit score market however lamented the present provide of offers accessible.
“There’s only some good offers however there are a lot of lenders,” he stated.
“The dynamics of provide and demand implies that these alternatives in non-public credit score are gone now.
“We want we may do extra.
“It’s about who desires to promote first.”
Learn extra: Personal debt sector poised for inflow of pension cash