The Credit Crunch #68

Three Insights from Configure Partners. Fundraising from Edelweiss Alternative, Cresset Partners and Castlelake

👋 Hey, Nick here. A special welcome to all the new subscribers at Ares. As a reminder, Golub is the leading subscriber of The Credit Crunch 🥳 Share this with your colleagues to knock Golub off the top spot.

If you’re new, this is the 68th edition of my weekly newsletter. Each week I write about private credit insights and fundraising announcements. You can read my previous articles here and subscribe here. Scroll to the bottom, if you’re here for the fundraising news.

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📚 Reads of the week

TCW and Oaktree see a “tremendous level of liability management” over the next 18 months amid a combination of “bad documents” and aggressive fund managers. Link

Apollo: There are ~1,200 companies that private equity have been owned for more than five years. These companies need some level of debt servicing. Link

Ares: The History and Current State of Private Credit Link

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📊Charts of the week

Configure Partners published their Q124 Credit Market Update.

Below are three of my favorite insights, but you should also read the full update here. I’d highly recommend it.

1. BDC Origination has begun to recover from 2022. Volumes are still ~50% lower than the peak in 2021.

   

2. Spread Compression - Lenders are competing heavily for these new deals

3. Sponsor Equity Requirements for new deals have fallen back below 50%.

💰Fundraising news

Edelweiss Alternative, an India-based asset manager, closed its $900 million Special Opportunities Fund III. The fund is India’s largest private credit fundraise this year. Edelweiss lends to middle market companies across India. It received investments from the Canadian Ontario Teachers’ Pension, Florida’s State Board of Administration, and Swedish Pension Fund, AP4. More here and here

Cresset Partners, a Chicago-based investment manager, raised over $500 million for its flagship private credit fund. The fund invests in a diversified portfolio of first-lien, senior-secured loans to middle market borrowers. Cresset has partnerships with seasoned credit managers and invests alongside them through separately managed accounts, joint ventures, and other bespoke structures. More here and here

Castlelake, a Minneapolis-based alternative investment firm, raised funds for its Asset-Based Private Credit III fund. The fund focuses on asset-based investments in specialty finance, real assets, and aviation. More here and here

This newsletter is for education or entertainment purposes only. It should not be taken as investment advice.