Latest news with #privateCredit
Finextra
02-06-2025
- Business
- Finextra
Entering the OTD era: Why originate-to-distribute models are key to portfolio diversification
Join this webinar, hosted in association with FIS, to explore the rise of the originate-to-distribute model, and how AI can help banks optimise their balance sheets and portfolios. What has led to the shift from originate-to-hold to originate-to-distribute (OTD) model, and what are the advantages that an OTD model offers to banks? As private lending increases, what are the main challenges that banks face in the secondary loan trading market? Higher interest rates have led to higher risk for banks. How can organisations improve the economic value of loans after regulatory and capital cost? What are the opportunities AI offers in the optimisation of portfolios, risk management and balance sheets? When we look at the lending market, the increase of private credit institutions is one of the major challenges eating into traditional banks' margins. In the UK alone, the private credit market was valued at £1.58 trillion in 2023 and, as more players enter the market, is projected to grow to £2.22 trillion by 2028. Seeing as private credit largely operates outside the traditional regulatory parameters that incumbent bank lenders are subject to, banks not only face increased competition, but also higher capital and regulatory cost. Yet while competition is a significant challenge, it also poses an opportunity as many banks have scaled origination capabilities and can leverage originate-to-distribute (OTD) models to maximize profitability. Distributing more allows banks to do more business, maximise their net interest margin, and boost the economic value of loans while still owning their customer relationships. While the US already has an advanced syndication and secondary loan trading market, the OTD model has started to find a growing foothold in European organisations as well. However, familiar challenges remain: most banks do not have the right data structures in place to optimise their balance sheets and determine the right loans to hold or distribute. Emerging AI technology can help banks identify the assets that, due to liquidity or maturity, have higher-than-usual capital costs, and determine the loans that are more profitable economically and thus should be kept on balance sheets. So how can banks start implementing the right (AI) solutions and strategies to help optimise their loan portfolios? Register for this Finextra webinar, hosted in association with FIS, to join our panel of industry experts who will discuss why growing private lending puts pressure on banks, how distribution can help decrease risk and increase profitability, and how AI can help optimise balance sheets.
Bloomberg
29-05-2025
- Business
- Bloomberg
Pimco's Stracke Sees Asset-Based Finance as Key Area of Growth
Pacific Investment Management Co. is building out its investments in asset-based finance to meet client demands to diversify away from more traditional areas of private credit. 'That's an area that's really picking up speed in terms of the availability of finance outside of banks,' Christian Stracke, president and global head of credit research at Pimco, said in an interview on Bloomberg TV.
Zawya
12-05-2025
- Business
- Zawya
Gulf asset manager Amwal launches $150mln private credit fund
DUBAI - Gulf asset manager Amwal Capital Partners said on Monday it had launched a Shariah-compliant private credit fund for $150 million, targeting companies with a focus on asset-backed solutions for tech-enabled platforms. It will also pursue direct lending opportunities, targeting 12 to 15 transactions over its five-year term, mainly in Saudi Arabia and the United Arab Emirates, the firm said in a statement. The fund, which already exceeded its initial close target, "has attracted leading institutional investors from the region," said Sharif Eid, partner and co-head of fixed income at Amwal. Based in Dubai since 2016, Amwal also opened an office in Riyadh in 2023. It lists sovereign wealth funds, international institutional investors and multi-family offices, among its clients.
Zawya
12-05-2025
- Business
- Zawya
Amwal Capital partners launches Shariah-compliant private credit fund
DUBAI, UNITED ARAB EMIRATES – Amwal Capital Partners, an independent alternative investment firm with offices in Dubai and Riyadh, today announced the successful launch and first close of its Shariah-compliant financing fund. The fund is designed to address the rising demand for ethical, Shariah-compliant financing solutions from investors, and flexible capital for small and medium-sized enterprises (SMEs) that remain underserved by the regional banks. The newly launched $150 million ACP Shariah Financing Fund will provide capital to emerging companies across a range of sectors, with a particular focus on asset-backed solutions for tech-enabled platforms. It will also pursue direct lending opportunities, targeting 12 to 15 transactions over its five-year term, primarily in Saudi Arabia and the United Arab Emirates. 'Regional private credit presents a compelling opportunity to deliver equity-like returns through exposures that are uncorrelated to public markets, overcollateralized and well structured', said Sharif Eid, Partner and Co-Head of Fixed Income at Amwal Capital Partners. 'Corporate leverage is also low across the GCC, creating favourable lending dynamics'. SME lending in the GCC remains both underserved and underpenetrated, with SME loans comprising under 10% of total lending compared to over 20% in developed markets. The regional SME credit gap is estimated at $250 billion. 'Private credit represents one of the most structurally attractive opportunities in the region's financial ecosystem. The SME credit gap highlights a chronic mismatch between capital supply and real economic need. Our fund is purpose-built to address this imbalance through Shariah-compliant financing overlooked by traditional channels.', added Fadi Arbid, co-Founder and Chief Investment Officer of Amwal Capital Partners. Recent reforms across the GCC, particularly in the United Arab Emirates and Saudi Arabia, have introduced material changes to legal and regulatory frameworks, enabling more effective structuring, enforcement, and security. Amwal Capital Partners reports a strong pipeline for the ACP Shariah Financing Fund, targeting sectors such as logistics, vehicle leasing, and FinTech, with expected maturities ranging from three to four years. The fund is launching with two warehoused transactions targeting the GCC's growing tourism industry and the strategic agricultural food trade segment. The fund is actively engaged in several other asset-backed financing deals and expects to complete two to four more transactions this year. 'The fund already exceeded its initial close target and has attracted leading institutional investors from the region', concluded Eid. The launch of the fund follows the successful launch of the ACP Shariah Hybrid Income Fund in December that offered a semi-liquid structure for investors to access private credit, the first such product in the region and for Islamic investors. Amwal Capital Partners' private credit and hybrid income funds are designed to deliver high-yield returns while maintaining strict Shariah compliance, with every investment opportunity structured from inception to meet Islamic finance principles. Zeina Rizk, Partner and Co-Head of Fixed Income at Amwal Capital Partners, stated that 'the Shariah Hybrid Fund offers investors a compelling opportunity to take advantage of the best of both worlds—pairing the liquidity and opportunities of the public sukuk market with the enhanced return potential of private credit, while benefiting from their low correlation'. 'Demand for both products has exceeded expectations since our fund raise began in September. The demand is equally met with a strong opportunity set and pipeline that we are excited to undertake' concluded Arbid. About Amwal Capital Partners Amwal Capital Partners is an independent asset management firm focused on the Middle East and North Africa (MENA) region. The investment team brings several decades of experience and a consistent track record across diverse asset classes, primarily public equities, public fixed income and private credit. Amwal Capital Partners operates through Amwal Capital AlMaliyah, which is based in Riyadh, Saudi Arabia and is regulated by the CMA; and Amwal Capital Partners Limited, which is based in Dubai, UAE and is regulated by the DFSA.
Yahoo
10-05-2025
- Business
- Yahoo
Wall Street Plays Long Game as Deals Go Private
(Bloomberg) -- A KKR & Co. debt sale shows how far Wall Street is willing to go to keep leveraged underwriting business from slipping away to private credit after periods of turmoil. As Trump Reshapes Housing Policy, Renters Face Rollback of Rights Is Trump's Plan to Reopen the Notorious Alcatraz Prison Realistic? What's Behind the Rise in Serious Injuries on New York City's Streets? A New Central Park Amenity, Tailored to Its East Harlem Neighbors NYC Warns of 17% Drop in Foreign Tourists Due to Trump Policies After losing a €1.1 billion ($1.24 billion) buyout financing assignment to direct lending rivals, banks including Jefferies Financial Group Inc. and Citigroup Inc. kept themselves on the private equity giant's payroll by agreeing to extend low-fee revolving credit for KKR's acquisition of Karo Healthcare. In exchange, KKR will allot them a part of the fee on the deal they lost to private lenders led by Apollo Global Management Inc., according to people familiar with the matter who asked not to be identified because the matter is private. Banks are set to pocket around 40% of the 1.75% underwriting fee, the people said. The unusual arrangement hints at efforts to maintain relationships during bouts of market volatility that can win them business later. Banks often steer clear of undrawn credit facilities with negligible fees, agreements that tie up capital that could be used to make more profitable loans. If they offer them at all on a leveraged deal, it's usually in conjunction with more lucrative term loans or high yield bonds. Now, however, Wall Street's leveraged finance desks, which chased fee-rich deals to reel in a third of investment-banking revenue in recent years, are in no mood to fritter away some of their edge like they did in 2022. After taking losses on 'hung deals' back then, they came to regret their reluctance to back acquisitions and provide undrawn credit while direct lenders made inroads into their business. 'Banks are continuing to evolve,' said Jeremy Duffy, a partner at law firm White & Case LLP who advises on leveraged finance. 'They are acutely aware of the onward march of private credit and are reacting accordingly.' Yet 2025's wild market gyrations have already pushed borrowers toward private credit funds that can ride out volatility better than banks. Karo's bank lenders, which include HSBC Holdings Plc, alongside KKR Capital Markets, extended about €175 million in undrawn facilities. What went unused is the €1.1 billion of drawn debt they'd committed for the buyout of the Swedish consumer-health company. KKR hadn't yet countersigned the agreement, the people said, and eventually opted for a private unitranche, a blend of junior and senior debt, of the same size. More than 10 lenders including Apollo, Jefferies and CVC took part in what became possibly the tightest-ever pricing for a European direct lending deal despite the market turmoil. KKR decided to pay some of the traditional lenders a fee anyway because for about 10 days in early April, before private lenders stepped in, the banks were carrying that risk amid the tumult. Spokespeople for KKR, HSBC and Citi declined to comment. A representative for Jefferies didn't immediately respond to requests for comment. With undrawn loans now a possible bargaining chip for banks, speculation is rising over how soon they'll come across a situation similar to Karo's. One that's being closely watched is the acquisition of Spanish waste management services business Urbaser. Private credit funds and banks are competing to underwrite a package that includes over €2 billion of drawn debt. At the same time, any buyout could require €1.5 billion or so of guarantee and revolving credit facilities, people with knowledge of the matter said earlier this month. 'It is not surprising that banks are taking a longer-term view on maintaining and nurturing relationships in this market,' said Sabrina Fox of Fox Legal Training, a leveraged finance expert. 'Even if that means short-term loss, there is a much higher potential for long-term gain.' Week In Review At the Milken Institute Global Conference this week, key players in private credit talked up their next 'golden opportunity' as they look for bargains amid the recent market gyrations. US high-grade corporate bond sales surged this week to about $45 billion, the highest level since March. It's the latest sign that markets are reopening after being shut for part of April amid escalating trade wars. Even companies that will likely face pressure from global tariffs, including Apple and General Motors, tapped the market. Thawing markets are spurring banks that were stuck with $6 billion of buyout debt amid the tariff turmoil to look for ways to start offloading it to investors. Companies financed in the private credit market started showing signs of stress in the first quarter, according to recent results from business development companies. For decades buyout firms largely stuck by the maxim that lenders got looked after first when one of their businesses was in trouble. Those days are now over. Far from priority, or even equal, treatment, many creditors are getting shoved ever further back in the line. Citigroup Inc. is ramping up lending to private equity and private credit groups, working to catch up with peers like JPMorgan Chase & Co. and Goldman Sachs Group Inc. after the bank spent years on the sidelines. JPMorgan Chase & Co. is set to lead about $6.5 billion in debt financing to support private equity firm 3G Capital's purchase of footwear maker Skechers. There were a series of notable bankruptcies this week: Rite Aid Corp. filed for bankruptcy again, less than a year after completing a restructuring that was supposed to turn the troubled pharmacy chain around. The company won court approval to run an expedited process to sell customers' prescription information to rival pharmacies as it prepares to unload or close its stores. WeightWatchers, known for its diet programs once endorsed by celebrities including Oprah Winfrey, filed for bankruptcy after struggling to compete with drugs like Ozempic and the rise of TikTok fitness influencers. Synthego Corp., which makes gene-editing tools for drug developers and other researchers, filed for bankruptcy with plans to sell itself to its main lender, an affiliate of private equity firm Perceptive Advisors. Sumitomo Mitsui Banking Corp. is joining forces with asset managers at Monroe Capital and MA Financial Group to work together on $1.7 billion of lending deals in the fast-growing private credit market. On the Move Morgan Stanley Investment Management has hired Peter Campo as managing director and head of floating-rate loans Mitsubishi UFJ Financial Group has hired John Clements from Barclays to be its head of collateralized loan obligations Deutsche Bank AG hired Citigroup Inc. executive Nicola Baker to expand its US private banking operations as Germany's biggest lender pushes to do more business with the world's ultra-rich. Hilltop Securities has appointed Jason Lisec to lead municipal sales and trading Toronto-Dominion Bank's Jason Wen, head of US investment-grade credit sales and trading, will be leaving the firm in the next several months as part of job cuts following a shakeup at the top of the firm's global-markets unit Nomura Holdings Inc. has hired Bank of America Corp.'s Moritz Westhoff to head its US rates business Investment banker Gary Antenberg is joining Royal Bank of Canada from Barclays Plc to focus on insurance and alternative asset management clients Matt Maloney, a partner at Gramercy Funds Management, has left after a decade with the emerging-market focused hedge fund --With assistance from Rheaa Rao. How the Lizard King Built a Reptile Empire Selling $50,000 Geckos Maybe AI Slop Is Killing the Internet, After All US Border Towns Are Being Ravaged by Canada's Furious Boycott With the New York Liberty, Clara Wu Tsai Aims for the First $1 Billion Women's Sports Franchise Pre-Tariff Car Buying Frenzy Leaves Americans With a Big Debt Problem ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
