Corporate Financier – Pools of capital: the rise of private debt

06 July 2023

Our co-Managing Partner Marc Ciancimino talked to PDI’s Andy Thomson for his article on the rise of private debt for ICAEW Corporate Financier Magazine.

Private debt is an asset class that’s risen meteorically – and looks set to grow further. But tough economic conditions and a flexible approach to covenants mean there may be challenges, too. With major flux in banking and lending markets, Andy Thomson looks at who will provide debt for mid-market deals.

The events of the past two months, involving Silicon Valley Bank and Credit Suisse, maybe have faint echoes of the great financial crisis. However, systemic risk appears less likely because governments and regulators have reached for the safety nets that were simply not available to the likes of Lehman Brothers 15 years ago. But will pressure on the banks lead to further retrenchment? And will it create an opportunity for debt funds to increase their market share even further?

Marc Ciancimino, a co-founder of private debt fund manager All Seas Capital, says it’s too early to tell how things will play out, but notes: “It could certainly put something of a dampener on bank appetite. Banking will only become more regulated and governments, which have taken the risk of bailing out some institutions, will require banks to do what they want them to do – which is more likely to be lending to the real economy, rather than funding leveraged buyouts. I do think credit committees within banks will be getting more nervous about deals right now. Funds, as always, will be ready to step in.”

A pdf of the full article is below: