Is Private Credit cyclical?
Hey,I have a friend who works in a reputable European/UK Private Credit fund, and he told me that they had an incredible year. Analysts received a 100% bonus, associates got 150%, and certain VPs were granted up to a 300% bonus, which is nowhere near what IB dons are receiving this year. Interestingly, they also received similar bonuses last year.I was somewhat surprised because I believed that the private debt market typically follows the trends of the levfin market, which has seen significant declines over the past year.Is this performance an anomaly within the industry, or is the private debt market not as cyclical as I assumed?Thanks
EDIT: This is based in London
Private credit is a ~1.5T market and growing. Lenders are being massively over-paid right now, yielding ~12% on the top of the capital structure, given SOFR (base rates) have risen ~400bps in the last year.
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