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.
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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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