Alternative Credit is attracting Private Equity and Real Estate investors. Yields are relatively compelling and mitigate many risks not rewarded today.
It has not gone unnoticed by the some of smartest sales people we talk to, that both the buyers of businesses (Private Equity firms) and Buildings (Real Estate Investors) are now buying loans and CMBS respectively. The thinking goes like this:
Own the company and it's assets. Or own the senior secured financing of that company for a more certain double digit return, with low leverage, that is in line with fund targets.
For CMBS the story is similar, but potentially even more compelling. With interest rates still rising and property valuations falling in many major cities, yields on the mortgages behind these buildings are higher today. A phenomena that may remain for as long as rent and property valuations face continued downward pressures.
In recent years alternative fixed income assets such as mortgage loans, infrastructure financing and private debt have become much more important categories for institutional investors. They can provide opportunities to increase portfolio yield when the (often lower) liquidity of these assets is not a constraint. This is typically the case for long-term investors, such as pension funds and life insurance companies.
2023 Is About Security and Manager Selection
Not Just For Bull Markets
Recession Proof And/Or Illiquid
ON INVESTORS MINDS
ON INVESTORS MINDS
Relative Value Has Returned
Watch Out For Delinquency
Earning Yield
The Choice Is Huge
ON INVESTORS MINDS
ON INVESTORS MINDS
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