Private Credit Pulse - 1/17/25

Hello and welcome to Private Credit Pulse by Financial Profiles, a weekly account of the latest industry news and views to help you stay current on the buzz in this dynamic space. A few industry events are popping up now that the new year is in full swing. This includes an upcoming webinar hosted by Morningstar, which just announced its “2025 Credit Outlook: Private Credit” will take place on January 28th. 

Goldman Sachs Targets Nonbank Lenders with New Division 

This week, Goldman Sachs announced the creation of the Capital Solutions Group to enhance its presence in the private credit market. This new division aims to compete with nonbank lenders by combining the firm's financing, origination, and risk management capabilities. CEO David Solomon highlighted the high demand for private credit and equity among clients, positioning Goldman Sachs to capitalize on this growing sector. Institutional Investor notes that Goldman aims to leverage its strengths in financing, origination, and risk management to compete with nonbank lenders and capitalize on the increasing demand for private credit.

KBRA Forecasts 3% Default Rate for Private Credit in 2025 

Credit ratings firm KBRA predicts a 3% default rate for private credit in 2025, citing slowing revenue growth and fewer rate cuts. Despite improved debt capacity for most borrowers, some may face defaults due to economic challenges. The incoming Trump presidency is expected to have mixed impacts, with potential benefits from lower taxes and reduced regulations, but concerns over inflation and competition from a resurgent banking sector are persistent. KBRA sees growth opportunities in investment-grade debt and specialty finance, while emphasizing the need for private credit to adapt to evolving market conditions.

Private Credit Firms Step In to Support UK Businesses Amid
Market Turmoil

Bloomberg reports that as British markets face turmoil, private credit firms are seizing opportunities to invest in UK companies, driven by low valuations and a weakened pound. With public markets struggling, UK employment declining for the second consecutive year, and other factors weighing down the economy, businesses are facing mounting challenges in securing credit. Private lenders are stepping in, seeing value in UK businesses and aiming to fill the void left by retreating banks. The UK remains the largest private debt market in Europe, generating 30% of European deal flow in the first half of 2024. This trend highlights the flexibility and resilience of private credit in volatile economic conditions. In related news, Ares announced this week that it raised $30 billion for its European Direct Lending Strategy. 

Private Credit Trends & Commentary  

Private debt news & deals around the globe 

Amid tokenization race, Tradable brings $1.7B private credit onchain 

North American Non-Banks to Continue Tapping Debt Markets to Curb Refi Risk 

Private credit in PE: Will it continue to thrive in 2025? 

The Force Behind the Private Credit Boom 

Growing Risks From PIK Draw Watchdog Scrutiny 

Private credit funds take control of Alacrity in $4.3bn restructuring backed by BlackRock 

Percent’s 2025 Private Credit Forecast: How the Asset Class will Dominate the Financial Landscape 

Private Capital in Focus: 2025 Trends to Watch - MSCI 

Smaller companies driving demand for private credit 

AllianceBernstein: Drivers of private credit demand are shifting 

Firm News, Including Thought Leadership and Marketing

Apollo: 2025 Credit Outlook: Defying Gravity 

Chailease Holding Heir Andre Koo Jr. Builds NY Private Credit Firm K8 Capital 

Blackstone Private Credit Fund Starts to Win Over Europe’s Rich 

Fitch Assigns Expected 'BBB-(EXP)' Rating to Nuveen Churchill Direct Lending Corp. 

Blue Owl: Navigating the Credit Markets 

Apollo: Can Private Markets Be the Alternative to Lofty Public Market Valuations? 

AllianzGI Raises €1.5 Billion for Secondary Private Credit Fund 

Ramirez Asset Management Acquires $500 Million Private Credit Strategy Team From Avenue Capital Group 

Goldman Sachs creates new division to boost focus on financing 

Blue Owl Capital Completes Major Merger to Form $18.6B Business Development Giant 

BMO Expands Private Credit Reach Via Deal With Alternative Asset Manager 

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