New York, N.Y. – May 20, 2022 - Whether the Fed raises interest rates three or four times to try to stamp down soaring inflation, the new, tighter rate environment will steer debt investors away from high-yield public fixed income. As institutions seek out yield, private debt has the potential to capture a larger portion of institutional allocations with its combination of higher starting yields and shorter maturities.
Accordingto a recent survey by Churchill Asse tManagement, public asset volatility, growing inflation concerns and rising interest rates are driving higher interest in private debt than ever before.The war between Russia and Ukraine has only fanned the flames. Of the investors surveyed, 90% said they were either investing in private debt now or were considering adding it to their portfolios.
What will make this market cycle different from previous periods of rising rates is that the efficiency gap between public and private investing is closing. More deals will get done thanks to digital marketplaces that allow investors to quickly source deals, as well as conduct due diligence, score, match, price and close transactions, significantly accelerating the number of deals that get done.
On the Finitive platform, the loans we facilitate have a weighted average maturity of about two years, and over 80% are variable rate. In the coming year we anticipate accelerated deal flow on the platform as lenders allocate capital quicker and more efficiently than before, and borrowers gain access to financing with less friction and more price transparency.
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Finitive is the leading data-driven credit marketplace that matches institutional investors with private credit borrowers, including non-bank lenders such as specialty finance companies,online lenders, marketplace lenders and private credit funds. Learn more or sign up as an investor or borrower at www.finitive.com
All information provided here in is for informational purposes only and should not be relied upon to make an investment decision and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be relied on in making an investment or other decision. Readers are recommended to consult with a financial adviser, attorney, accountant, and any other professional that can help you understand and assess the risks associated with any investment opportunity. Private investments are highly illiquid, speculative and are not suitable for all investors. Investments can lose their entire value. Securities on the Finitive technology platform are offered through North Capital Private Securities Corporation, member FINRA/SIPC.