These 20 execs are powering the $1.2 trillion private-credit market
TGIF! It's Dan DeFrancesco checking in from NYC.
Today we've got stories on dueling holiday videos from rival investment firms, the tech companies PE firms might be on the hunt for deals for, and a peak inside one of the most exclusive neighborhoods in the world.
But first, let's underwrite some loans.
1. Meet the new-age lenders.
Private credit is a topic du jour on Wall Street.
While loans being privately negotiated outside traditional, public channels might not seem like the sexiest of topics, it's something that continues to crop up across the Street.
Take one of the most high-profile deals involving a financially-focused firm — splitting up EY's audit and consulting businesses — which is now considering borrowing money from the private markets, according to The Wall Street Journal.
But it's not all sunshine and daisies when it comes to private credit.
As interest rates continue to rise and a recession looms, everyone expects loan defaults to increase as well. And while the status of traditional debt is somewhat more telegraphed due to its public nature, it's a lot harder to discern the status of private debt due to the fact it's, well, private.
So who's behind this mysterious market that has now swelled to $1.2 trillion and accounts for more than 20% of the aggregate capital leverage companies borrowed?
Insider's Rebecca Ungarino mapped out 20 of the most powerful people in the space from firms like Sixth Street, Golub Capital, Ares, and Blackstone.
I spoke to Rebecca about what stood out to her while compiling the list. She mentioned how these asset managers are essentially becoming the new banks via their lending operations.
Take Sixth Street and HPS Investment Partners, two firms that were somewhat niche a few years ago but have grown into bigger players thanks to the rise of private debt being seemingly everywhere, Rebecca said.
And while there might be some signs on the horizon of tough times ahead, these executives seem nonplussed.
"While rising rates will be beneficial to the sector in the near term, long-term outperformance is ultimately driven by the ability to avoid credit costs through the cycle," Sixth Street co-president Joshua Easterly, who made our list, told analysts last month. "We believe we will continue to achieve this by following our same playbook that resulted in cumulative net realized gains since inception. As one of our favorite bands once put it, 'nothing else matters.' I'm sure Metallica will appreciate the callout on our earnings call today."
In other news:
2. Happy holidays from your friendly, neighborhood PE firm. Blackstone and Apollo released their annual holiday-themed videos, which included top executives poking fun at themselves and plenty of cameos. Check them both out here.
3. When PE firms start hunting for deals, these are the tech companies they'll target. Everyone is anticipating private-equity firms to go on a buying spree next year as companies' valuations continue to plummet. We identified the 34 tech companies that might be high on their list. Check them all out here.
4. A new family office enters the fray. The Mills family, which amassed its fortune from the sale of Medline Industries, is launching a family office to help manage some of its money, Bloomberg reports. Here's more on what the $5 billion firm will be focused on.
5. Meet the agents and managers helping the world's best athletes become content creators. There is plenty of money to be made on the court or field, but athletes can enjoy long-term financial success in media as well. Here are the 24 people helping to make that happen.
6. Just because you didn't get laid off doesn't mean you should feel safe. Some tech companies are instructing managers to label low performers on their teams, potentially signally more cuts at some point in 2023. More on why some companies are deploying a tactic known as "stack ranking."
7. Artificial intelligence might play a big role in whether you get your next job. HireVue helps companies like Amazon, Unilever, and Goldman Sachs speed up the hiring process by using AI to assess job seekers. Here's how it works.
8. If your New Years' resolution is to find a new job, read this first. To land your dream job you need to figure out what it is first. An executive coach shares tips for how you to figure out what is the perfect gig for you.
9. Take a tour of the most expensive neighborhood in the US. Miami's Indian Creek Village, also known as "Billionaire Bunker," has a median listing price of $21.2 million. Take a peak at the island whose residents include Carl Icahn and Adriana Lima.
10. Wait, you ONLY have a wine cellar? Turns out, having one room dedicated to booze isn't enough for the ultra-wealthy, The Wall Street Journal reports. From whiskey lounges to tequila tasting rooms, take a look at the rooms the wealthy have dedicated to alcohol.
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