Maybe the only thing riskier than JPMorgan’s multifaceted private credit strategy is ignoring private credit entirely
No other bank has been as expansive in its attempts to join this market

As direct lenders seek efficient, scalable financing tools, private credit CLOs are growing fast
PCLOs have reached USD 135bn, or 13% of the overall CLO market

Private credit is the regulatory fix that became an asset class
Institutional investors have pushed private credit to greater scale than either loans or bonds

As the economic environment evolves, investors need to change too
Ten years ago, I became a regular contributor to Creditflux. It seems like yesterday — until we reread our debut submission.

Private credit funds are more stable, lower levered and more regulated than you might think
The private credit market’s steady and impressive growth has caused some pundits to voice concerns about an eventual bubble. While we expect there to be more dispersion in private credit funds’ performance in the coming years, we don’t see signs that a bubble is about to burst.

Nordic countries have much in common — including a growing appetite for private credit
Norway, Sweden and Denmark share many similarities. The ‘Nordic model’ includes high standards of living, free-market economies, liberal welfare states, a tendency for workers to unionise, and a relatively narrow gap between low and high earners.

ESG initiatives should avoid unfavourable reactions by pursuing substance over form
By any financial measure, the collaboration of trans activist Dylan Mulvaney with Bud Light hurt the brand. What was formerly America’s best-selling beer saw its market share collapse — from over 35% in May 2023 to around 9% in June — because of a boycott by US conservatives after a 60-second TikTok video aired of Mulvaney drinking it.

Despite CLO gloom in Europe and greater take up of private credit in the US, markets on both sides of the Atlantic are similar
I’ve just returned from a trip to London, my first since taking on the mantle of editing Creditflux, and was struck as always by how stubbornly far apart the European and the US markets remain.

Points up front
Get off the bus, but don't despair

Letter from the editor
It’s a curious thing to come back to your beginning, but that’s where I find myself, writing this letter as the new editor of Creditflux. I first joined 17 years ago, fresh out of university. 

We pulled back because yields didn’t seem to match the risk. Now it’s better
During visits to Melbourne and Sydney last month, conversations with clients and friends about private debt revealed important contexts to understanding how investors there think about the asset class.

"It’s critical to understand that lower marks are not necessarily indicative of declining borrower performance"
Despite rate hike plans going unchecked, there is cause for optimism in private credit

"Conditions making deal financing challenging for issuers can harm beneficial terms for investors"
Direct lending terms look better than at any point in the past decade. But is there enough to go around?

"Ironically, the better prospects for floating rate assets leads some to wait for even better returns"
Ironically, the better prospects for floating rate assets leads some to wait for even better returns  

Past returns: Alhambra CLO paves the way
Five years ago in Creditflux, we reported that Be-Spoke Capital was launching the first SME European CLO since the financial crisis.

"Extreme volatility can push BSL yields close to mid market levels, although that trade never lasts"
The two segments of the loan market are on different paths as mid-market volumes rise

We’ll get through this awkward patch
Wide liabilities have made pricing CLOs trickier in the past few months. But speakers at Creditflux’s CLO Symposium were optimistic that the arbitrage is OK — so long as you can place those triple As

"ESG should not be viewed as a set of principles being imposed on investors — it’s a natural evolution"
It’s not easy for fund managers to assess the most green option  

"Strong growth is not necessary for good loan or bond performance, but it keeps a recession at bay"
The picture in credit was looking good (even with inflation rising) until Russia invaded Ukraine

"Rules require 5% risk retention, but for first loss CRS that is not enough"
PGGM's Mascha Canio takes our credit quiz 

Past returns: Ares constructs private CLO
In Creditflux 10 years ago we reported on Ares Management putting together a quasi-CLO in a bilateral transaction involving senior debt investor Sumitomo Mitsui Banking Corporation

"‘B-level’ assets could struggle to find optimal valuations"
Acquisitions are increasing and companies focused on health and technology could benefit

"Some observers believe Europe’s opportunity in private debt lies at the lower end of the middle market"
European private debt has lagged its counterpart in the US. But a growth spurt may not be far off

Points up front: HPS gives it 200%
One of the biggest fundraisers this year in credit is HPS Investment Partners. Its $11.7 billion Specialty Loan Fund V totals $15.4 billion including leverage

"Never have the choices for issuers been more varied, nor the market dynamics more complex"
Direct lending deal terms are becoming more attractive in Europe