Private equity firms sponsor at least 70% of direct lending transactions
Ron Cantowitz · Ron Kantowitz – Direct Lending's Evolution and Invesco's Edge (EP.457) · Jul 17, 2025 · at 15:51
Ron Kantowitz, Head of Private Debt at Invesco, discusses the structure of the direct lending market and the prevalence of private equity backing.
0:00 / 0:03exact quote · 3.6s
720p mp4 · rendered on demand · StarZero watermark
“Today, at least 70% of all direct lending is sponsored.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Ron Cantowitz
Converting cash-pay debt to PIK is a definitive signal of distress
“If you're restructuring your deals where you're converting some of your current cash into PIC, there's only one reason you're doing it. You're doing it because the company doesn't have the free cash flow to service your loans.”
Kantowitz: Public equities unlikely to yield 10-15% in the near term
“It's hard to see our equity markets growing 10, 15% from here in the near term, given all the vol in the markets, but if you choose to invest in this asset class and you can deploy, you're going to be sitting there generating low double-digit returns, hopefull…”
Commercial banks will inevitably find ways to re-enter direct lending
“They should, and they will find a way to get involved in this business, but it's hard. They're not really able to take these assets on their own balance sheet. All the issues that we all lived through during the GFC, they're muted today, but they still resonat…”
AUM growth forced former middle-market direct lenders to migrate upmarket
“If you look at the entities that were dominant in the middle market 10, 15 years ago, They don't play in the middle market anymore. As their AUM, their capital base has grown, deployment pressures become so significant that they've had to find more efficient w…”
Mezzanine debt investing is difficult outside the smaller end of the market
“It's been a difficult market to play in mezzanine, unless you're playing really at the smaller end of the market where it's not as common.”
Invesco's direct lending team refuses secondary loan pieces from competitors
“If we were to get a call from another direct lender who said, hey, we've closed the deal. We're long, fifty million dollars. We'll send you our IC memo. Would you guys want to buy it? Not for any reason other than that's just not how we conduct business. We wo…”