CVC cutting distressed debt team
Came across this article today and was curious to hear the rationale for switching to lending vs distressed debt in this environment.
Came across this article today and was curious to hear the rationale for switching to lending vs distressed debt in this environment.
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From my understanding, the direct lending market is booming right now given the market for private loans from issuers who aren't able to get syndicate deals / need special terms and flexible financing on a situational-basis given the environment. Why wouldn't a large alt investment manager pivot to that strategy? Can't speak to why they straight up cut all of them but the pivot certainly makes sense.
Lately it's been a lot easier to be a provider of capital to a company in need than it is to come in and buy the cheap debt and try to refi or restructure. Until we get a sustainably higher default rate where decently attractive debt is trading cheap (as opposed to the shit thats trading distressed rn, distressed returns are gonna continue to not be very attractive).
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