$10Billion Private Credit Mammoth
Plus iCapital's $200 million private credit fund, Brazil's Azul to secure $400m in debt, Wendel's new acquisition.
Good morning. The private credit industry continues to demonstrate significant growth potential, although financial regulators have expressed concerns regarding the associated risks. The FT ‘s deep dive on HPS Investment Partners the $10 billion private credit whale and Blackstone remains optimistic and identifies substantial opportunities in this evolving landscape.
Let's dive into the week's happenings.
Industry News
Global financial regulators are increasingly concerned about rising valuations in private credit. They worry that lenders may be concealing distressed loans and their potential impact on private markets and insurance investments.(Link)
iCapital, an alternative investment marketplace, is currently engaged in fundraising for a new $200 million private credit fund. This fund will focus on actively investing in private credit in collaboration with notable private equity firms, including Bain Capital, Audax Group, and Charlesbank Capital Partners (Link)
Blackstone believes the private credit industry is still in its early stages, with growth likely to be driven by investment-grade assets (Link)
Growing interest in energy transition and artificial intelligence deals is expected to increase demand for private credit. (Link)
Corinthia Global Management, a private credit startup, is targeting $36 billion to invest in private credit opportunities. (Link)
Other Stories
Brookfield Wealth Solutions, a provider of capital-based solutions to the insurance sector, is currently evaluating the divestiture of a $1.5 billion private credit portfolio. (Link)
The Florida State Board of Administration has announced its intention to sell $4 billion worth of private credit stakes.(Link)
Dealflow
Industrial
Cologix, a prominent operator of network-neutral interconnections and hyperscale edge data centres, has successfully secured $1.5 billion in funding. This total comprises $1 billion in multi-asset development debt and $500 million in equity financing raised from new and existing investors.
Technology/ Media / Telecoms
Gateway Casinos & Entertainment the one of Canada’s leading gaming companies and private equity owned is seeking $1.3 billion in private credit to refinance loans and pay dividend to its shareholders.
Financial Services
Deutsche Bank AG is negotiating to divest a portfolio of commercial real estate loans valued at $1 billion.
Alternative asset manager LCM Partners Ltd, owned by Brookfield Asset Management, is raising $6.5 billion for a new fund that will invest in non-performing loans.
Infrastructure
UAE’s largest sovereign wealth fund, Abu Dhabi Investment Authority (Adia) will invest about $750 million in the structured debt instruments of India’s GMR Group.
Transportation
Azul a leading airline operator in Brazil’s airline industry and a key player in the LATAM region is in talk with investors to secures $400 million in new debt.
Consumer
Banks and private credit firms are offering $5 billion in debt financing to prospective acquirers of Bausch + Lomb, the Canada based eye health products company. The anticipated valuation of the company, inclusive of debt, is approximately $10 billion. TPG and Blackstone are also evaluating the possibility of a joint bid.
M&A
Wendel the Paris-based listed private equity manager is acquiring a controlling stake in Chicago-based Monroe Capital Management Advisors for $1.13 billion for a 75% stake and a roughly 20% share of the firm’s carried interest on past and future investments (Link).
In the Chart
Money managers see private credit as one of the emerging growth areas in the asset management industry.
PCW ’s Picks
A profile of HPS Investment Partners the $10billion private credit 'whale' ( Link)
How can banks tap into the private credit craze (Link)
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