Kiel Bowen’s Post

In this Legal Update, we explore the promising prospect—for lenders and borrowers alike—of utilizing term debt tranches to attract new lenders into the existing fund finance market and provide increased flexibility to existing collateral structures. Read here: https://lnkd.in/gcfnreNS   #FundFinance #PrivateEquity #MayerBrown

In this Legal Update, Kiel Bowen, Andy Hogan and I explore the promising prospect—for lenders and borrowers alike—of utilizing term debt tranches to attract new lenders into the existing fund finance market and provide increased flexibility to existing collateral structures. Read here: https://lnkd.in/gZVfKmAT   #FundFinance #PrivateEquity #MayerBrown

In this Legal Update, we explore the promising prospect—for lenders and borrowers alike—of utilizing term debt tranches to attract new lenders into the existing fund finance market and provide increased flexibility to existing collateral structures. Read here: https://lnkd.in/gAAQAWsU   #FundFinance #PrivateEquity #MayerBrown

𝐃𝐢𝐫𝐞𝐜𝐭 𝐥𝐞𝐧𝐝𝐢𝐧𝐠 𝐟𝐞𝐞𝐬 𝐨𝐧 𝐭𝐡𝐞 𝐫𝐢𝐬𝐞 In an updated fee survey conducted by Cliffwater, which researched fees and expenses for private middle market corporate lending funds, covering 66 firms managing $1.1 trillion in direct lending assets, the following key findings were observed. 𝐓𝐨𝐭𝐚𝐥 𝐅𝐞𝐞𝐬 𝐚𝐧𝐝 𝐄𝐱𝐩𝐞𝐧𝐬𝐞𝐬: 💰 The average total fees and administrative expenses for private debt funds amount to 4.12% of the net asset value (NAV). 🔎 This 4.12% total cost is comprised of "effective" management fees, carried interest, and administrative fees, with averages of 1.86%, 1.78%, and 0.48% respectively. 📅 Compared to the previous 2023 study, there has been a 0.18% increase in the total cost. The rise in interest rates contributed to an increase in carried interest from 1.50% to 1.78% of net assets, partially offset by a decline in effective management fees from 1.96% to 1.86%. ✒ Fees as a percentage of NAV vary significantly across lenders, ranging from a low of 3.22% (10th percentile) to a high of 5.36% (90th percentile). These variations can be attributed to differences in the management fee rate, whether management fees are charged on net or gross assets, and the level of leverage employed. 📊 When focusing solely on fees and deducting administrative costs and historical credit losses from current middle market yields, private fund investors (LPs) can expect to pay lenders an average of 3.68% in exchange for a net portfolio yield of 13.43%. After accounting for all fees, expenses, and credit losses, the average net fund return for private debt fund investors is projected to be 9.75%, up from 9.68% in 2023. It is worth noting that all numbers are stated in US-Dollars and hence European investors would have to deduct about 1-2% when comparing yield metrics with European strategies. 𝘚𝘰𝘶𝘳𝘤𝘦: 𝘊𝘭𝘪𝘧𝘧𝘸𝘢𝘵𝘦𝘳 𝘓𝘓𝘊. 👉 Comparing these fees to other investment strategies in the real asset lending space, including infrastructure debt, it appears that fees in private middle market corporate lending funds are significantly higher. Considering the risk and fees involved, direct lending strategies collateralized by real assets may be a more attractive choice within the Private Debt segment, as a much larger share of the credit risk premium can be reaped by the LP at this stage of the cycle. It is also worth noting that corporate lending spreads continue to be compressed across various markets, including liquid credit, CLO and senior secured loans markets. **own opinions only/no investment advice** #privatedebt #infrastructuredebt #realestatedebt

We continue to see activity in the debt finance markets, but the higher cost of capital, ongoing geopolitical uncertainties and mismatch in buyer/seller pricing expectations meant that deals have been getting done with less leverage. The syndicated lending market remained challenged and therefore, private capital providers played a more significant role in lending activity. The looming threat of more regulation of direct lenders, as well as conflicts issues between sponsors and private capital providers, could dampen growth, but for the immediate future, private credit looks to remain a solid option for borrowers. Click here to learn more: https://bit.ly/4aDWnrd Authored by: Amy Kennedy, Corinne Musa and Andrew Sagor #AkinPE #PrivateEquity #PrivateCredit

Last year our discussions with clients focused mostly on Senior Direct Lending. But with broadly syndicated loan issuance in January higher than at any time since November 2021, we are starting to see signs of life in other parts of the private credit landscape, in particular Junior Debt, a capital solution that can be extremely beneficial to issuers and investors alike. KKR's George Mueller discusses why:

Debt settlement companies often promise relief but fall short in delivering real benefits to consumers. In the latest opinion piece from Auriemma Roundtables, Director Sheldon Stewart argues that negotiating directly with lenders can lead to better outcomes, saving borrowers money in the long term and protecting their credit scores. Read the full story here: https://lnkd.in/enE3FbYZ #debtsettlement #collections

#Loan_against_mutual_funds, also known as a margin loan, is a financial product that involves borrowing against your mutual fund investments. The loan amount can be used for various reasons, such as funding a business, paying off debts, or even purchasing real estate. When considering a loan against mutual funds, there are several factors to consider, including the market’s role in the success of the loan. Read more:- https://lnkd.in/gNnjjfxt

#Loan_against_securities allows individuals to borrow funds by pledging their financial assets, such as stocks, bonds, or mutual funds, as collateral. This type of loan offers quick access to capital without liquidating investments, often featuring lower interest rates and flexible repayment options, making it a strategic financing solution. Read More:- https://lnkd.in/gh7-vznY

In a new report by specialist debt advisory Arc & Co., the firm has revealed that it completed £219m worth of loans in H2 2023, with the largest facility being £25m. Find out more here: https://lnkd.in/dDwmWj_D Edward Horn-Smith #tradingupdate #arcandco #report #statistics #specialist #debtadvisory