Blackstone’s $123 Billion Lending Platform
PIMCO's $2 billion fundraise, BC Partners Credit new private credit firm acquisition,Amphenol $1.5 billion bond sale.
Good morning. Some interesting trends are emerging in the private credit industry, particularly the potential for higher investor yields. Several leading asset management firms are considering the introduction of private credit ETFs. Additionally, Blackstone is exploring an acquisition deal for HPS Investment Partners, a $10 billion private credit
Let's dive into the week's happenings.
Industry News
Family offices appear less enthusiastic about the $1.7 trillion private credit sector. According to data from Preqin, ultra-high-net-worth individuals and investors in Europe and North America seek opportunities in more established asset classes, such as private equity and real estate.(Link)
Private credit investors can expect to receive higher yields for an extended period. Randy Schwimmer, vice chairman at Churchill Asset Management, suggests that the strong U.S. economy and tighter inflation monitoring will result in higher interest rates for longer. (Link)
The Securities and Exchange Commission is reviewing proposals for public-private credit exchange-traded funds as investment managers aim to make private credit accessible to the general public (Link)
BlackRock is in talks to acquire HPS, one of the most prominent private credit firms, with a valuation exceeding $11 billion
Pacific Investment Management Co (PIMCO) has raised $2 billion for its specialty finance strategy, as it attempts to make into private lending. (Link)
Talking Point
Blackstone continues to assert its leadership in the private credit market, with its global direct lending platform successfully managing over $123 billion in assets. This achievement follows the closing of its first semi-liquid U.S. direct lending fund, which has secured $22 billion in investable capital, exceeding its initial target of $10 billion. This notable accomplishment reflects Blackstone’s commitment to addressing the increasing demand for innovative and flexible investment solutions within the private credit sector..(Link)
Dealflow
Industrial
A consortium of banks, together with Ares, an investment firm, is set to provide a $1.6 billion debt package to facilitate KKR's acquisition of a 25% equity stake in Enilive, a subsidiary of the Italian energy corporation Eni, at a valuation of $3.2 billion.
Amphenol, a manufacturer of electronic equipment, has initiated a bond sale amounting to $1.5 billion.
Technology/ Media / Telecoms
Siemens, the prominent German engineering conglomerate, has announced its intention to acquire Altair Engineering, a software development company, for a total of $10 billion, including debt.
Financial Services
American National, a leading insurer owned by Brookfield, intends to divest $1.5 billion in private credit stakes.
NewDay, a financial services firm based in the United Kingdom, will acquire the credit card portfolio of UK retailer Argos for $935 million.
Logistics and Transport
DSV A/S, a leading logistics company, has successfully raised $5.4 billion to finance its acquisition of DB Schenker, a Deutsche Bahn subsidiary valued at $15.5 billion; this is being achieved through a multi-tranche bond transaction.
Great Wall Motor, a Chinese automotive manufacturer, is exploring the potential issuance of $1 billion in convertible bonds.
Aeromexico, the Mexican airline, is preparing to issue $1.1 billion in bonds to refinance its outstanding debt.
Consumer
Eagle Football Holdings (EFH), a multi-club ownership entity, is seeking $300 million to partially repay a loan extended by Ares in advance of its planned recapitalisation, which will total $1.1 billion (€1 billion) in equity and debt.
More Fundraising
5C Investment Partners, a newly established private credit firm co-founded by two former Goldman Sachs executives, has successfully raised $1.6 billion in capital.
360 One WAM, an Indian asset management firm supported by Bain Capital, is poised to raise $357 million for its private credit fund.
M & A
BC Partners Credit is positioned to indirectly acquire a majority stake in Runway Growth Capital LLC, an SEC-registered investment adviser. Runway Growth Capital manages approximately $1.4 billion in private credit assets and focuses on providing senior loans ranging from $30 million to $150 million to rapidly growing companies in North America.
In the Chart
Private credit expansion has been notable following the 2008 global financial crisis, during which banks significantly reduced their risk exposure. This contraction in traditional lending created a substantial opportunity for private credit firms to address the resulting gaps in the credit market.
PCW ’s Picks
The Opportunities and Challenges of Private Credit ( Link)
Three reasons to invest in private credit (Link)
Exploring Private Credit Architecture (Link)
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