Private credit managers are expected to provide more than $100 billion of new financing this year, in part to companies battered by the effects of the coronavirus pandemic, shows research by the Alternative Credit Council and law firm Allen & Overy.
Respondents involved in the research expect to deploy an aggregate $53.7 billion by the end of this year, according to the ACC and Allen & Overy's "Financing the Economy" report. Since the respondent sample represents about 51% of global private credit assets, the ACC extrapolated the data to suggest that private credit managers will invest $113 billion in total this year.
Financing so far has not only been provided through new lending strategies, but also to support businesses affected by the coronavirus pandemic. To these firms, "private credit managers have worked with businesses facing stress and offered pragmatic support when this was most needed. Resizing financial commitments to reflect changed circumstances has helped stressed borrowers establish a new path towards growth," a report about the research said.
However, COVID-19 is also impacting some credit managers. Those with exposure to cyclical or coronavirus-affected sectors have been hit in terms of the ability to take advantage of investment opportunities thrown up by the market downturn, the report said. These factors will likely drive dispersion of performance this year and next.
