Supercharged Fixed Income – Direct Lending

October 31, 2016 | ,

Direct lending is an established asset class that provides a total return to investors typically between that of high yield bonds and mezzanine debt. It is considered private credit because the assets in a direct lending portfolio are loans originated privately between the direct lending fund manager (acting as lender) and the borrowing company. Due to the private nature of direct lending, the asset class produces attractive risk-adjusted returns supported by reduced competition, lower volatility, and favorable negotiation leverage for the direct lender. Since the financial crisis of 2008, direct lending as an asset class has featured unprecedented growth in deal volume as well as assets under management. This growth is attributed largely to post-crisis regulations that effectively forced banks, the traditional direct lenders of the past, to shed their direct lending operations. Non-bank direct lending asset managers have in turn benefitted from the significant rise in direct lending opportunities.

Download PDF

Related Content

10.13.2023

3Q 2023 Market Insights Video

This video is a recording of a live webinar held on October 26 by Marquette’s research team, featuring in-depth analysis…

10.26.2023

Portfolio Trick or Treat

Coming into 2023, investors were cautiously optimistic about 2023 market returns; cautious considering the broad losses across asset classes during…

10.12.2023

U.S. Equities: Surprising Strength Gives Way to Macro Risks

Equity market strength through the third quarter continues to challenge the common expectation going into the year. Cumulatively through September…

09.27.2023

The Implications of a Government Shutdown

The federal government will shut down if Congress is unable to pass funding legislation by October 1, and a bill…

09.22.2023

2023 Investment Symposium

Watch the flash talks from Marquette’s 2023 Investment Symposium livestream on September 15 in the player below — use the upper-right…

08.09.2023

Observations from Across the Pond

Marquette regularly sends a senior member of our research team abroad as part of ongoing manager sourcing…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >