Could distress trends in leveraged loans offer a glimpse of future distress rates in private-credit senior loans? We chart the path for these loans, and private-credit mezzanine debt, since interest rates began to surge. 

Spreads on corporate mezzanine loans in private-credit funds have fallen dramatically since 2022, changing the picture on the loans that are normally deemed higher-risk than senior loans. Funds treated real-estate borrowers differently, however. 

Private-credit funds are in the spotlight because of their growth — and the opaque credit risk of the loans they hold. We use a signal of nonperformance to examine the trends in defaults for the asset class. 

Excess returns in private markets are often attributed to the extra compensation for carrying liquidity risk, but is this perception of risk warranted? We analyzed various buyout-allocation targets to find evidence for the concern.  

Private-market investors experienced a sustained slump in distributions across buyout and venture capital and, to a lesser extent, private credit. We look at the recent apparent recovery in private-market cash-flow activity and what that could mean for limited partners. 

We segmented India’s public equity market to study patterns in its factor, thematic and industry exposures. And to assess how the current market profile could change, we also analyzed private firms that may be in the pipeline to become public. 

Subscription lines of credit have become widespread across buyout, private-debt and real-estate funds, but elevated interest rates are prompting investors to reassess their sub lines’ value. How much has it cost funds to service this debt?

The increased use of subscription lines of credit by general partners in some private-capital funds has lifted returns by squeezing the timeframe over which returns are calculated. We examine buyout, private-credit and real-estate funds to see where the greatest inflation lay.  

Visibility on the use of subscription lines of credit is of key importance to limited partners in private funds. We examined a selection of real-estate, venture-capital and buyout funds to note some key differences between and within private-capital strategies. 

Amid the growing usage of sub lines across private capital funds, we explore how intensively funds draw on their sub lines — a critical determinant of how sub lines will affect internal rates of return.

Private capital funds have grown increasingly comfortable utilizing subscription lines of credit, though usage varies. We examine their deployment across venture capital, buyout, real estate and debt funds. 

Constructing self-financing private-capital portfolios, where distributions exceed contributions, can simplify a limited partner’s liquidity-management strategy and reduce cash drag. How could diversification help investors in this effort? 

Are general partners overstating zombie valuations, and thereby postponing eventual write-downs, or should LPs ultimately expect this capital to be distributed in full? We present evidence that zombie assets have been, on average, appropriately valued. 

An assessment of private-market cash flows as of June 2022 indicates mixed signals for limited partners. The prudence of maintaining a diversified portfolio is as important as ever.

Analysis of the Burgiss Manager Universe revealed heavy concentration within private debt across rate structure, seniority and benchmark index. We break down the findings for investors.  

Estimating risk in private markets presents a perennial challenge for reasons such as the low frequency of operations and irregular cash flows. We discuss the importance of risk-adjusted returns for asset allocation and present a way to gauge volatility across asset classes.