10 March 2023
The global financial crisis of 2007 spawned the rapid evolution of the private credit industry. More than a decade and a half later, we believe that the current global macroeconomic environment will further cement its status as a growing market.
Despite a slowdown in M&A financings, following a peak of activity in 2021 and the first half of 2022, demand for private credit is continuing to increase as a more popular source of funding.
While its spread has borne familiarity and comfort among borrowers, private credit is also benefitting from difficulties in other parts of the funding market. With inflationary pressures and rising interest rates, activity in syndicated offerings has declined.
Although the private credit industry has grown quickest in North America, it is now developing at speed in other parts of the world as well. Since 2012, the private credit asset class in Europe has grown from $US36.2 billion of AUM to $US187 billion in 2022, according to the Deloitte Private Debt Deal Tracker Autumn 2022.
Like many sectors, private credit is not immune to current economic and fiscal challenges, yet the mood within the industry is positive. “We’re continuing to see an increase in these types of financing requests that had traditionally been funded elsewhere,” comments Patrick Ottersbach, Head of Macquarie Capital Private Credit, Europe.
Head of Principal Finance, Americas
Head of Private Credit, EMEA