Private Debt
topic on 2 shows · 10 statements across 9 episodes
Capital Allocators 
the a16z Podcast
10 statements about Private Debt, every show
George: Banks and Private Debt Are Primary Funders of Private Capital
“The biggest funder of private capital is actually banks or private debt.”
J.P. Morgan targets 50% to 70% of private portfolios in core PE
“In the private markets, we think about allocating our portfolios half to 70% of it every year is in core private equity. 20 to 25% is in growth equity and venture. Mostly growth equity, although we've been leaning into venture the last couple years. 15 to 25% …”
Nesbitt: Private debt returns depend on beta because alpha is limited
“Most asset classes, there's upside optionality, fixed income, and private debt as well. It's downside optionality, and so there's diversification, and there are a lot of good managers, and so we focus a lot more on beta than we do on alpha, which is limited in…”
Nesbitt: Private debt will maintain a 3% to 5% illiquidity premium
“I can go back to the eighties and tell you that everybody thought the private equity premium would go away. And it's really been pretty consistent at three to five percent. I expect the same on the private debt side.”
Fink: Private Debt Has Not Operated Through a Real Distress Cycle
“On the other side, the private debt markets haven't really been around during a proper distress cycle. Because they really weren't of any size in 2008, which was the last time you had a real cycle.”
Abell: Most Lower Middle Market Leverage Comes From Private Debt
“Vast majority of the leverage in our part of the market is not from traditional money banks, and it's certainly not syndicated loans. It's a lot of private debt”
Seides: The US economy cannot sustain private debt loans at 15%
“Fresh money opportunities in private debt are really interesting, because rates have gone up, and there's a dearth of capital, particularly in the middle market. The problem with that is that the economy can't sustain itself on loans at 15%. It just won't work…”
Lambert: Mercer Alternatives AUM is evenly split across five asset classes
“We've got specialty advice and implementation capabilities underpinned by research across private equity, private debt, infrastructure, real estate, and hedge funds. And actually they're each about 20% of our AUM.”
Institutional search for yield drives capital into private debt
“So the combination of all those factors is driving to greater allocations to privates I think given some of the high valuations pre-coronavirus, particularly private real estate debt and private debt, rather than necessarily private equity, where there was per…”
McCusker: Due diligence will stall briefly before surging in distressed credit
“I actually think it'll be slow right now, and right now being the next One to three months, call it. And then I think it's going to ramp up like crazy. One, it'll be a little bit of a backlog. And two, what we were talking about earlier, some of those credit o…”