Private Credit

Outlook
2025
Managers Can Add
$28 Billion in Fees Over Time

Private credit is set to meaningfully increase its share of investment portfolios as

managers position for an ongoing shift from traditional financing, while expanding
distribution and fundraising increases a vast addressable market. Respondents to a
Bloomberg Intelligence survey identified 11% potential market penetration as well as
regulatory and credit risks.

• Private Credit Can Boost Fees: Growing demand in the $41 trillion fixed-
income market can double related fees for alternatives managers in 15 years, an
additional $28 billion a year.

• Insurance and Retail Are Opportunities: Investment into private credit can
get an incremental boost from the expansion of insurance assets of private
equity firms, which could drive $6-$10 billion of annual industry-wide fees;
alternatives penetration of the retail market could triple to 8-10%. Dec. 4, 2024
• Size, Diversity Provide an Edge: Apollo, Ares, Blackstone and KKR, the largest
and most diversified alternatives managers, are poised for the fastest gains,
while Carlyle, Brookfield and TPG are rapidly adding private credit exposure.
The largest BDCs benefit from their broader platforms’ deal flow, underwriting
and portfolio management capabilities.

Featured in This Report: Throughout this report and at BI FLOWG <GO> on the
Terminal, Bloomberg Intelligence’s proprietary models have estimated market size
and quantified fee opportunities in key growth businesses over the next 15 years.
Survey responses provide insights into key market participants’ views on
opportunities and risks.
 Dec. 4, 2024

Contents
Section 1. Executive Summary 2
Section 2. Catalysts to Watch 3
Section 3. Growth Potential 4
Section 4. BI Survey 7
Section 5. Credit Growth 11
Section 6. Insurance Inflows 15
Section 7. Retail Frontier 18
Section 8. Banks: Partners and Rivals 28
Section 9. Credit-Quality Risks 36
Section 10. BDC Risks and Rewards 39
Section 11. Company Impacts 48
Bloomberg Intelligence Research Coverage 54
Copyright and Disclaimer 57
About Bloomberg Intelligence 58

Lead Analyst
Investment Management,
Paul Gulberg pgulberg4@bloomberg.net
Exchanges, Banks, Americas
Contributing Analysts
Ethan Kaye Investment Management, Americas ekaye4@bloomberg.net
Herman Chan Banks, Americas hchan357@bloomberg.net
David Havens Credit, Americas dhavens18@bloomberg.net
Samuel Radowitz Banks, Americas sradowitz@bloomberg.net
Editorial & Visuals
Rik Stevens, Tony Robinson, Philippe Tardieu, Justin DeVoursney

More detailed analysis and interactive graphics are available on the Bloomberg Terminal

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 Dec. 4, 2024

Section 1. Executive Summary

Private Credit’s $28 Billion in Fees on Taking Debt Share
11% Private credit managers -- including the three largest, Apollo, Ares and Blackstone, as well as
Potential market share
capture of $41 trillion total expanding peers KKR, Carlyle, Brookfield and TPG -- stand to benefit from opportunities in
addressable fixed-income
market lending and asset-based finance. Tighter regulations, competitive and collaborative relationships
with banks, and a hunger to finance growing insurance-related assets could help deepen their
2x engagement in an expanding $41 trillion fixed-income market. Business development companies,
Potential global private
credit midterm growth or BDCs, make up a large portion of the direct lending market, helping drive managers’
continued penetration of the retail wealth market, and offer a window into the assets that underlie

43% private portfolios and their credit quality. Though already leading in leveraged lending, the
Share of survey potential to gain an asset-weighted 9-11% of the market could translate into $25-$28 billion of
respondents citing credit
quality as biggest risk to industry management fees, led by the largest managers. Current available capital and growth in
private credit insurance assets combined are less than a third of the addressable set, leaving room for gains.

Key Research Topics

• Private Credit Can Boost Fees: Private credit managers may be able to eventually capture 9-
11% of the $41 trillion addressable fixed-income market, translating to $25-$28 billion of
industry fees.

• Insurance, Retail Growth: BI-tracked managers can capture 6% of traditional insurance

managed assets which could add over $2 trillion of assets under management. Private credit
is seeing strong demand from retail investors and could help drive a tripling of alternative
assets’ share of private wealth, from 3% today.

• Size Advantage to Larger Managers: The largest alternative managers, that manage over
$2 trillion of total credit assets (private and public), have broad fixed-income capabilities
allowing them to attract an outsized share of demand.

• Survey Finds More Demand: Respondents to Bloomberg Intelligence’s proprietary private

credit survey noted ongoing demand and increased activity for the asset class, as well as risks
related to credit quality and regulation.

• BDCs Signal Weaker Credit View: Publicly traded BDCs offer a window into credit quality
among private assets. Credit quality has shown signs of deterioration, though managers have
actively addressed underperforming credits, resulting in low nonaccruals, yet elevated losses
and a higher incidence of payment-in-kind features.

Performance and Valuation

BI-covered North American alternative asset managers’ shares have appreciated about 60% on
average so far this year, favoring credit-focused managers, expanding the average forward 12-
month P/E multiple to 25x. This reflects average consensus growth of 23% in fee-related earnings
and 28% in profit in 2025. BDC multiples also advanced as rates increased and credit held, with
the average now trading around 1x price-to-book, with an 11% dividend yield. Top BDCs with
strong dividend coverage have performed largely in line with the S&P 500 year-to-date, while
those experiencing credit issues have underperformed.

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 Dec. 4, 2024

Section 2. Catalysts to Watch

Doubling Growth Propels Fees Mid-to-Long Term

Broader penetration of the global fixed-income markets, including of investment grade and asset-
backed transactions, could support upside to expectations for a doubling of the traditionally
defined private credit market. As the largest managers attract the bulk of private credit assets,
including through wealth and insurance channels, a potential 20% annual fee growth rate is not
unreasonable to achieve, adding billions of fees over 10-15 years. Near-to-medium term rate and
credit risks are unlikely to derail the demand.

Critical Milestones:
• 2025: Assets increase by low-to-mid-double digits through fundraising and
inorganic growth

• 2025: Largest managers’ fees could rise by median 20%

• 2025: Potential rate cuts do not hinder private credit demand, credit
quality holds

• 2025-29: Private manager-sponsored asset-backed finance activity, grows

faster than credit lending

• 2029: Private credit assets under management could about double,

according to a BI Survey and industry estimates

• 2029-34: $6-10 billion in industry-wide annual fees from insurance

• 2034-39: Fees from private credit and insurance could increase by $28
billion a year

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 Dec. 4, 2024

Section 3. Growth Potential

Privates Eye 11% of $41 Trillion Fixed-Income Market

Alternative managers, including private credit leaders Apollo, Ares and Blackstone, could
eventually capture 11% of the $41 trillion fixed-income market vs. about a third of that in 2023,
results from our BI survey show, a share that could add $28 billion of management fees for the
industry and that further penetration could bring up to $75 billion. Bankers see more share
turning to alternatives than do managers.

3.1 Alternative Credit Managers May Reap Billions

Private credit's opportunity may extend across North America and Europe as managers partner or
take share from banks, asset-based financing structures and possibly some public instruments.
The total fixed-income market may climb from $37 trillion in 2023, and about $4.3 trillion of that
could be up for rotation long term, potentially generating $28 billion in fees in 10-15 years for
alternatives managers.

In the medium term, $520 billion is available for investment by private credit funds, which can
garner $5 billion in fees. An additional $640 billion may be available in new insurance assets over
five years if the seven largest managers boost this by 10-12% annually, or $1-$2 billion in fees.
Performance-fee opportunities can add to our calculations.

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 Dec. 4, 2024

Figure 1: Debt Markets Ample Opportunity for Private Credit

Alternative managers' fee opportunity on fixed-income penetration may be triple that of our
internal calculations, based on the maximum capture responses to our BI survey. A 30% capture
Seeking $28 billion
in management of each credit area, which is likely an exaggerated expectation, may lead to over $75 billion in
fees potential management fees, compared with the $25 billion using our assumptions. This would
require taking 29% of the pie, much higher than our 9%.

These results bode well for credit-focused managers like Apollo and Ares. Apollo has 82% of its
assets in credit, which touts fixed-income replacement as a growth driver and doubles its total
addressable market. Ares, with 72% of its assets in credit, has 0.8% market share in an
addressable market similar to BI's projections. About 32% of Blackstone's assets are in credit and
insurance. Other BI-tracked managers are also growing in credit.

Expectations for private credit growth to outpace other alternative assets help the associated
revenue pool, and we believe that managers with a concentrated exposure who already
dominate the industry should continue to benefit. BCG estimates global revenue in the asset class
was $11 billion in 2023 and could grow 11% annually through 2028, up from prior estimates of 10%
through 2027, while it could grow almost 12% a year as a percent of assets under management. It
might represent 7% of alternative assets in 2028 vs. 6% now and 5% in 2015, according to BCG,
while we calculate that the six largest managers earned over $7 billion in private-credit fees in
2023 and note additional sizable competitors.

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 Dec. 4, 2024

Consistent with the broad asset-management industry, the space is dominated by a handful of
big participants. Scale, track record and resources may allow these incumbents to seize on
growth in the asset class.

Private credit managed assets are expected to reach $2.6 trillion by 2029, growing 10%
compounded annually from 2023, according to Preqin. Despite marginally lower growth from
prior forecasts, the asset class will likely be among the faster-growing alternatives segments, not
far behind private equity. Its share of overall alternatives is 11% as of March.

Rate cuts have started, but interest rates remain elevated, which boosts demand for private credit,
as it's better hedged than public credit given its largely floating-rate nature. Still, higher rates are
starting to pressure borrowers. Private credit lending is filling gaps left by banks, with direct
lending accounting for more than 40%. As banks contend with rising credit risk, opportunities in
middle-market lending and asset-based financing may favor private markets.

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 Dec. 4, 2024

Section 4. BI Survey
Private Credit Seen Rising Double Digits to 11% of Debt

The private credit market could expand by double digits annually in the medium term to about $3
trillion, replacing 11% of the broad fixed-income market, based on our survey of almost 140
investors, fund managers and bankers (see Fig. 2). Most growth is projected to be in North
America, followed by Europe. Respondents see inflows across investors, getting significant
contributions from the insurance and wealth channels. Deployment can accelerate, driving fees.
Managers' fee rates will likely be stable, while providing 100-300 bps of excess spread above
public markets. Those surveyed broadly agree on key opportunities and risks. Bankers' views for
higher growth imply competition as well as collaboration with private credit. Risks can arise from
credit quality, borrower cash flows and regulation, according to most respondents.

4.1 Respondents Broadly See Private Credit Gains

Our internal assumption was that private credit can replace about 9% of the traditional fixed-
income market, so we asked investors, fund managers and bankers to indicate their expectation
for penetration of the addressable market by alternative asset managers across various asset
classes, which totaled 9-14% in the aggregate for each group. Respondents said that the US has
the most potential -- including for high yield, leveraged loans and bank balance sheets -- with
Europe not far behind.

Bankers and lenders seem the most optimistic about private credit's potential, acknowledging the
industry demand and regulatory frictions that make private investors and managers competitive.
Investors and managers hold similar views.

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 Dec. 4, 2024

Figure 2: Fixed-Income Market Capture Potential

Bank lenders most

optimistic about
private credit
opportunities

Asset managers may provide the greatest support to private credit (as seen in Fig. 3), chosen by
32% of respondents as the biggest allocators going forward, with sovereign wealth funds next, at
23%. The rest is split between pensions, insurers and retail. Only 17% of respondents identified
insurance investors as leading contributors to private credit. Some large private equity managers
we cover invest at least half of their credit assets on behalf of insurance clients or insurance-
owned entities.

Retail and wealth could be a high-growth area. More investors and lenders in the survey see the
group becoming a leading allocator, which may imply that demand is even more ambitious than
product supply by managers.

Private credit industry fundraising is holding steady in 2024 after slowing in 2023 from a robust
2021-22, yet the leaders continue to grow. The pace is still healthy, while additional fixed-income
inflows come from recurring products, including insurance. Funds have brought in $221 billion
year to date, likely to exceed $236 billion in 2023.The number of funds attracting money has
dropped, highlighting the dominance of the largest private credit managers, such as Apollo, Ares
and Blackstone, and their diversified yet less credit-focused peers. We anticipate more activity
through the end of the year, while insurance-related inflows could support broader fixed-income
replacement given robust demand for the asset class.

Direct-lending strategies face more competition, as well as opportunities to work and compete
with banks.

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 Dec. 4, 2024

Figure 3: Key Allocators

Asset managers seen

as biggest
allocators,
retail/wealth
smallest

4.2 Partnerships Offer Opportunity

Over 70% of lenders and half of investors and fund managers expect deployment to accelerate
modestly over the next 12 months, consistent with an improving deal environment as interest
rates decline. More than 20% of fund managers and investors expect a significant increase, while
more than 60% of the overall group expect at least a modest increase. Lenders' strong view of
rising private credit deployment could suggest an expectation of more competition with
managers -- or collaboration, in which banks originate loans and managers provide capital.
Recent partnerships, including Apollo's deal with Citigroup to manage up to $25 billion in direct
lending and $5 billion with BNP Paribas for asset-backed finance, highlight the trend.

Such views should be positive for management fees and fee-related earnings, as managers
typically start collecting fees on deployment of credit funds.

Most respondents see private lending holding a spread premium of 100-300 bps over public
markets (illustrated in Fig. 4), with 44% pointing to a 200-bp premium. Most of the spread
compensates for the lack of liquidity for private instruments, but it also indicates the benefits to
borrowers of faster and more certain execution of private transactions. Banks see a wider range of
private spread outcomes in their lending, though it’s still clustered around 200 bps, while bank
lenders have the largest share of groups surveyed that see excess spread at less than 100 bps.

As banks step back into middle-market lending and private credit managers look to defend
market share, excess spreads appear to be compressing.

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 Dec. 4, 2024

Figure 4: Spread Over Public Markets

Private credit returns that exceed those of public markets drive demand for the asset class and
sustain robust management fees. About 45% of respondents expect private credit fee rates to
remain stable, and more than 20% each see either a small decline or increase. No fund
managers, and just 4% of investors, expect significant declines.

Fees at the largest peers -- including Apollo, Ares, Blackstone, KKR, Carlyle, Brookfield and TPG --
could prove particularly resilient, as just 3.5% of private debt fundraising has come from
emerging managers this year, down from 15% in 2021. As the asset class expands and shifts
further into mainstream fixed income, more attractive fee products become possible.

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 Dec. 4, 2024

Section 5. Credit Growth

Alternatives’ Private Credit, Insurance Assets Swell

Alternative-asset managers are building capabilities and products to broaden their addressable
credit markets and opportunities for fees. Apollo, Ares, and Blackstone dominate and manage
over 60% of the industry's $2.1 trillion, and they continue to boost their insurance assets,
prompting them to expand beyond conventional private credit.

5.1 Credit Adding Share Among Publicly Traded Managers

The largest alternative managers (see chart in Fig. 5) are focused on augmenting their credit
portfolios ahead of other asset classes, supported by direct-lending demand and insurance-asset
acquisitions. Apollo, which holds 82% of its total assets in its Credit segment after 2020
insurance-asset acquisitions, maintains a higher credit concentration than Ares and Blackstone,
which have 72% and 32%, respectively. KKR's credit allocation is 43%, boosted by its Global
Atlantic purchase in 1Q21 (32% before the deal) and Manulife this year. Carlyle's purchase of
CBAM Partner's CLO portfolio, among others, increased credit to 43% of managed assets and
made it the world's largest CLO manager. Brookfield's is about 45% of the total, after adding AEL
in May.

TPG's Angelo Gordon deal brought $57 billion of assets, now 29% of the total.

Figure 5: Private Credit Assets Under Management

Apollo leads
private credit AUM
by a wide margin

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 Dec. 4, 2024

5.2 Insurance-Related Assets Fuel Private Credit

The largest alternative managers handle much more than traditional private credit, diversifying
with insurance-managed assets and liquid credit offerings. Private-credit assets at BI-tracked
alternative managers are up 19% since the start of the year, much of it allocated to investment-
grade credit, which is partly non-public, yet not captured by alternative-data providers.
Subtracting insurance assets for the seven largest standalone managers implies $1 trillion of
private credit, accounting for over half of the industry total.

Apollo, KKR, Blackstone and Carlyle manage the largest share of the estimated $1 trillion
insurance-related assets. Brookfield made a strong push adding AEL assets. All developed
capabilities beyond direct lending, allowing them to pursue other yield assets.

Figure 6: Alternative Credit Managers More Than Private

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 Dec. 4, 2024

Expansion of credit capabilities (see Fig. 7 below) unlocks broader addressable market
opportunities for alternative asset managers. Though larger private credit strategies such as
direct lending and distressed debt still dominate, firms have diversified into areas like liquid
credit and structured products, facilitating the deployment of dry powder amid credit demand
and continual insurance float.

Ares’ direct-lending franchise is its cornerstone, yet it holds $47 billion of its $335 billion of credit
assets in liquid credit, $12 billion in Asia and $41 billion in alternative. KKR, Apollo and Carlyle look
focused on asset-backed finance to aid deployment of insurance collections. Brookfield's Oaktree
specializes in distressed debt but manages across asset classes, while TPG's addition of Angelo
Gordon provides diversified credit exposure.

Figure 7: Large Manager Credit Capabilities

Available private credit capital is a small fraction of fixed-income markets, giving room for even
further growth as managers bring in strong inflows. Private credit's aggregate of about $520
billion in dry powder is just 1% of the addressable market, while the $249 billion in the hands of
the seven largest managers (48% of total, illustrated in Fig. 8) equals about 7% of the total
attainable share. Though direct lending and opportunistic funds are leading the opportunity,
structured credit and other verticals are growing.

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 Dec. 4, 2024

Insurance assets could add $640 billion, growing at 10% annually, after expanding at 15-20% a
year, led by Apollo, KKR and Blackstone, aided by competitive positioning and acquisitions.
These permanent-capital assets often hunt investment-grade lending and increasingly focus on
structured credit such as origination capabilities.

Figure 8: Dry Powder, Insurance Asset Base

Ares sits on largest

pile of dry powder

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 Dec. 4, 2024

Section 6. Insurance Inflows

PE’s Insurance Push Can Bring $6-$10 Billion in Fees

Investment into private credit is getting an incremental boost from the expansion of insurance
assets of private equity firms, which could generate $6-$10 billion in industrywide annual fees in
the medium term from that insurance growth, well ahead of expectations just a few years ago.
The gains are fueled by their capabilities and efforts in managing investment-grade and asset-
backed capital, in addition to alternative credit. Blackstone, Apollo and KKR may have a
combined $2.5 billion of such fees already.

6.1 Managers Progress Toward Possible Big Fee Payoff

Alternative-asset managers tracked by BI are showing greater ability and effort to capture a larger
share of traditional insurance assets, and we calculate they can get 6% of these holdings, with
potential upside that would drive more management fees, yet that might play out over time. Our
scenario excludes potential incentive fees, which may be generated in some asset classes or via
performance agreements. Combined, Apollo, KKR and Blackstone may already be producing
almost one-third of the base-case projection of $8.2 billion annually for the industry.

Applying hypothetical fees of 27.5 bps to core assets (mostly credit) and 75 bps to alternatives
suggests strong potential for fee revenue.

Figure 9: Insurance Assets Revenue Opportunity

Insurance could
generate $8 billion
in fees

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Alternative managers are embracing the insurance market (Fig. 10) as a key driver of managed-
asset growth, particularly in credit -- albeit with somewhat different approaches. Apollo manages
the most, with insurance assets making up about half its portfolio, mostly through fully owned
Athene. Its balance sheet capitalizes Athene, then directs investable funds to Apollo vehicles. KKR
is next on a relative basis with Global Atlantic, and Blackstone can increase its managed assets to
Managers say they $250 billion once deals are fully phased in. Brookfield closed its AEL deal in April, adding $50
see vast billion and targets another $50 billion from other third-party insurance over the next 5 years.
opportunities in Blackstone and Carlyle have used a more capital-light approach to asset acquisitions.
insurance
Blackstone and Apollo plan to manage all the assets of these insurance companies.

Figure 10: Current Insurance Involvement

Private credit and equity may be the most in-demand strategies, insurance-investor surveys show.
Even as a share of nontraditional investments, those declined to 29% in KKR's 2023 analysis from
32% in 2021, as investment-grade debt offers improved returns. About half of investors plan to
increase allocations to private credit and equity. A BlackRock survey found special
situations/opportunistic, corporate private placements and corporate direct lending to be the
most popular private credit strategy for insurers planning to increase allocations.

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 Dec. 4, 2024

Some 64% of CIOs in KKR's survey rely on alternatives to drive portfolio returns. Not only did
private credit offer better returns, but its investment-grade and high-yield components generated
lower impairments for insurance portfolios than the public market.

Figure 11: Insurers' Asset Allocation Plans

6.2 PE-Insurance Deals Drive Asset, Fee Growth

Alternative asset managers' focus on insurance assets has benefited from a period of elevated
interest rates and inflation. In a bid to meet their return objectives, US insurance companies
increased their allocation to private equity by 10% in 2019, according to AM Best, spurring a spate
of deals (which can be seen on the Bloomberg Terminal using the MA <GO> function). Overall
allocation levels have fallen slightly since 2021, to 29% in 2023 from 32%, according to a KKR
report, as risk-free rates became more attractive.

KKR, Apollo and more recently Brookfield (AEL, Argo), Carlyle (Fortitude) and Blackstone
(Resolution Life), have all announced expansion of insurance assets via acquisitions, adding over
$450 billion in assets under management combined. Ares and TPG each manage less but have
shown interest in expanding. Brookfield benefits from its parent corporation's insurance
operation.

Private equity's lofty insurance goals illustrate the potential for industry-asset and related fee
capture. After its 2022 Resolution Life deal, Blackstone lifted its expectations to $250 billion in
managed assets from existing insurance clients, and currently manages over $200 billion as non-
captive assets. Apollo aims to expand its insurance managed assets by doubling Athene to $600
billion in the five-year period ending in 2029 while increasing third-party capital from ADIP. KKR
manages $247 billion, $187 billion of which is from Global Atlantic, and recently expressed a
conviction to double these assets to $350 billion. Carlyle's service agreement with Fortitude now
has $79 billion of such assets.

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 Dec. 4, 2024

Section 7. Retail Frontier

PE’s Focus on Retail Demand in Product Development

The largest private asset managers are focused on expanding a suite of products for retail
investors as demand grows. This effort could add billions of management fees, potentially tripling
current levels over 5-10 years for the BI-tracked managers. The currently estimated 3% wealth
market penetration by alternative investments could grow toward 8-10%, which is consistent with
many market participants' ambitions. Retail-friendly investment structures include key private
credit drivers, such as BDCs, REITs and newly launched buyout products. We anticipate
continued demand growth for these products.

7.1 Wealth Trillions Could Triple PE’s Fee Billions

Allocations for private wealth investors could grow at a 12% CAGR to $13 trillion by 2032 (see Fig.
12), Bain projects, and we calculate that could add $10 billion or more of base fees. BI-tracked
names manage about $580 billion of the $145 trillion private wealth market, led by Blackstone, at
23% of its assets.

Retail adoption of private assets presents a multi-billion fee opportunity for large BI-tracked
managers, supported by demand, product innovation and constructive markets. The magnitude
and speed of growth remain variable. In the $145-$150 trillion high-net-worth and mass-affluent
market, based on Bain's calculation, it sees $4 trillion in retail alternatives, or 3% penetration,
while BI-tracked manager disclosures suggest 14% share. Assuming a conservative 1%
management fee (and ignoring incentive fees), Bain's projection for these assets to grow to $13
trillion, and our view of the largest managers increasing share, these peers could triple their retail
fees over a decade. Total alternatives could reach $61 trillion among all investors by 2032, from
$26 trillion in 2022, with institutional investors moving to $47 trillion from $22 trillion and private
$13 trillion from $4 trillion.

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 Dec. 4, 2024

Figure 12: Additional Retail Base-Fee Opportunity

Retail alternatives
could reach $13
trillion by 2032

Regulatory and volatile market conditions could be potential risks for retail growth into
alternatives, but increased investor sophistication and an improved sales infrastructure should
help capture rising demand.

Retail is an average of 14% of managed assets (Fig. 13) for BI-tracked firms, and most of the focus
is on attracting more retail money from accredited US investors, with a growing number from
overseas. Blackstone leads with 23% in retail, followed by Ares and Carlyle.

Blackstone has nearly reached its $250 billion target for 2026 and may significantly boost it.
Apollo's acquisition of Griffin Capital's US wealth-distribution unit supports its five-year goal of
generating 30% of fundraising from retail clients, or $50 billion through 2025, while KKR expects
wealth to become 30-50% of inflows over time, from 10-20% currently, and Brookfield anticipates
private wealth inflows will grow $12-$15 billion annually.

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Figure 13: Retail Share of Managed Assets

Retail accounts for

14% of large
manager assets

Alternative-asset managers see continued opportunity to provide more products to retail

investors, with comments on recent conference calls indicating a robust view of the market's
potential and a commitment to tapping it. Management teams recognize there's structural
demand for alternative assets within wealth portfolios.

Increased adoption of alternative investments bodes well for general partners' efforts to further
penetrate the segment. Of top-ranked advisers, 71% allocate 6%-20% of client portfolios to
alternatives, according to a 2023 survey by Shook Research and Blackstone, up from 53% in
2022. Just 14% of advisers allotted less than 5%, down from 32% in the preceding year.
Meanwhile, 15% allocated more than 20%, similar to 2022. Such figures suggest that more
advisers are growing more comfortable allocating their clients' assets into alternatives, though
they may be cautious about allocation size.

Some 85% of advisors planned to increase existing client allocations to one or more alternative
asset classes, according to a survey by CAIS-Mercer.

7.2 Established Managers Attract Most Retail Business

BI-tracked alternative asset managers can benefit from product breadth and reputation, attracting
retail investors, and these six (TPG did not reach the top 50) have contributed nearly half of retail
alternative investment fundraising over the past three years, according to Stanger data. These
managers' total assets represent about 30% of global private capital, as identified by Preqin, with
Blackstone raking in a third of the funds from 2021-23, while Blue Owl, the next largest, only
accounted for 9%. More than half (52%) of semi-liquid product sales went to the top two to six
sponsors in 2023, compared to 17% in 2021, calculated by Ares.

Managers compete over shelf space, as private wealth distributors tightly maintain the number of
firms on their platforms.

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Family offices, which represent about $3.1 trillion of assets under management, according to
Deloitte, in many instances could be comparably or higher allocated to alternatives relative to
institutional investors. They allocated 46% of assets to alternatives, based on a JPMorgan survey.
About 86% of the family offices held some exposure in private equity, and 38% held private
credit.

Nearly half (45%) of family office CIOs planned to increase their private credit allocation this year,
according to KKR (as seen in Fig. 14).

Figure 14: Planned Allocation Changes

45% of family
offices expect to
increase private
credit allocations

Alternative managers use products like business-development companies and REITs to engage
with retail investors, and we anticipate an expansion of such structures. BDCs allow for exposure
to private credit and have grown to over $250 billion in assets, more than doubling in three years,
while redemption requests amid real estate woes have slowed. Managers have also developed
products that grant access to buyouts.

Private managers' renewed focus on outfitting investment vehicles with retail-friendly structures
that provide intermittent liquidity should help them capture more assets. BDCs, REITs and interval
funds are among the most prevalent -- accounting for 60-80% of retail-product fundraising in
recent years, according to the Stanger Report -- though product innovation is also driving growth.
Blackstone's recently launched BXPE product is tailored to wealthy individual investors and offers
exposure to corporate buyouts, while the company expects its BREIT vehicle will become its
largest. KKR and Ares are gaining in retail via BDC products.

Distribution is key to growth, with Carlyle joining up with Oppenheimer, Apollo buying Griffin
Capital and Brookfield relying on Oaktree Wealth Solutions. Others have built in-house sales.

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 Dec. 4, 2024

Figure 15: Fundraising by Retail Alternative Product

Fundraising by
retail alternatives
topped $100
billion in 2022

Some 70% of investment advisers are planning to increase allocations to private markets in 2024,
according to a Hamilton Lane survey. Asset classes across the board are in favor, with the
exception of real estate -- especially commercial -- which has experienced economic headwinds.
Private credit is in demand, with 60% of advisers surveyed by Crystal Capital Partners expecting
to add exposure to the asset class; those that aren't are mainly concerned about risk.

Retail investors, however, tend to arrive late to the party in investment trends compared with
institutional. Credit assets have seen robust growth, though potential rate cuts could hurt returns
on floating-rate assets, while some alternative managers' comments indicate that real estate may
have already reached a bottom.

7.3 BDCs Get Boost From Retail, Private-Credit Demand

Business-development companies are likely to see sustained demand, as their structures sit at the
cross section of two major alternative-asset growth drivers -- private credit and retail wealth
penetration. Managers may also be keen to extend offerings as BDCs bring diversified fee
opportunities. Excluding private non-traded vehicles, assets under management have grown to
over $250 billion in 2024 from about $110 billion in 2020 and just $50 billion in 2013. New
launches from Bain, Nuveen, Fidelity and others should broaden product awareness and
distribution. The largest alternative managers, including Blackstone, Ares Capital, Apollo, Angelo
Gordon, KKR, Oaktree and Carlyle all have BDCs in the market.

BDC Ares holds about 10% of the AUM of the parent's credit unit yet generated 34% of the
segment's fees. Blackstone's BCRED manages over $60 billion.

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BDCs are a vibrant and growing segment with more than $50 billion of public bonds that provide
a window into the $2 trillion private-credit world. Consensus points to a benign economic and
interest-rate backdrop in 2025, supporting a receptive market for more BDC bond issuance. BDC
credit trends are mixed but skewed toward positive. Growth and low non-accruals are buoying
sentiment, though the elevated payment-in-kind rate could foretell building stress.

Private credit, including BDCs, is in a new phase of double-digit growth fueled by conducive
capital markets, about $500 billion of dry powder supporting deal flow, and a solid economic
backdrop. Consensus sees moderate GDP growth, low inflation and stable employment, along
with the prospect of multiple Federal Reserve rate cuts. Animal spirits have returned, with the 32
high-grade BDCs we track scoring 26% growth in the first three-quarters of 2024 in their
investments (see Fig. 16), now at about $250 billion. Barring a significant bout of volatility,
hothouse-growth conditions could last.

With strong growth and lower spread premiums, risk may also be on the rise. The IMF in April
recommended greater transparency and more "intrusive" regulation for the $2 trillion-plus credit
market worldwide.

Figure 16: High-Grade BDC Growth Is Trending Up ($ Million)

High grade BDC

growth up 26% in
2024 through 3Q

7.4 Debt Capital Markets Open Business for BDCs

BDCs are heavily reliant on external funding to support their growth ambitions, and access to
durable committed bank funding and bond financing via public debt capital markets is crucial to
their liquidity needs. Liquidity can be fickle, so having robust and diverse funding sources is key.
BDCs proved their mettle, for the most part, by keeping their external funding channels open

23
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 Dec. 4, 2024

(perhaps at a cost) in the challenging capital markets of 2022 and 2023, that saw major US
regional bank failures and 525 bps of rate increases by the Federal Reserve.

Debt capital market conditions have been far more amenable in 2024. BDCs have used this
change in tone to extend, enlarge and diversify their committed bank funding facilities. They have
also increased their profile with bond investors as existing BDCs and new entrants have issued a
record amount of debt in 2024.

Placid credit markets, with the US Corporate Bond Index near all-time tights at 83 bps, seem
receptive to ongoing BDC bond issuance, and through October, the high-grade BDCs we track
issued $20.5 billion of bonds (more than 4x the full-year amount in 2023). Blue Owl Credit
Income ($3.4 billion), Ares Capital ($1.9 billion) and Blackstone Private Credit ($1.8 billion) led the
charge, but the year has also featured issuance from BDCs such as Apollo Debt Solutions, Ares
Strategic Income and HPS Corporate Lending, with proceeds used mainly to pay down bank
credit facilities and fund bond maturities and growth. This seems quite prudent, as market
sentiment can shift rapidly and BDCs may not always have such ready access to funding.

BDCs are in the fortunate position of not facing heavy bond maturities (Fig. 17). Through the end
of 2025, high-grade BDCs face $8.3 billion of bond redemptions, and while no trifling sum, it
comes in the context of more than $20 billion of committed undrawn bank facilities, a BDC sector
with more than $50 billion of outstanding bonds, and a US high-grade market with $7.3 trillion of
debt outstanding. Only two BDCs face bond maturities of more than $1 billion through 2025:
Blackstone Private Credit Fund at $2.7 billion, and Ares Capital at $1.9 billion.

BDC maturities are set to increase to about $12 billion in 2026 before dropping off in 2027 and
2028, with another peak of $14 billion due in 2029. The growing stature and familiarity of BDCs
among bond investors may facilitate future issuance.

Figure 17: BDC Bond Maturity Schedule ($ Billion)

Bond maturities
appear
manageable for
BDCs

Committed credit facilities from banks offer liquidity and a cushion for BDCs should debt capital
markets suddenly sour on bonds from the segment. The large BDCs we track had 2Q aggregate

24
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 Dec. 4, 2024

revolving credit-facility commitments of $40 billion in place. Almost all of them extend out three
years or more, with average untapped availability of 56%. With BDCs facing only $8.3 billion of
bond maturities through the end of 2025, bank facilities offer ample liquidity.

Liquidity is further enhanced through an array of committed special-purpose-vehicle secured

conduit programs, as well as other securitizable unencumbered assets. With placid capital
markets for now, BDCs can pursue unsecured funding options.

Figure 18: Use of Bank Revolving Credit in 2Q ($ Million)

7.5 Ratings Mostly Trending Up for BDCs

BDCs are on a slightly positive footing from a credit-rating perspective (as shown in Fig. 19), with
a handful of recent upgrades and positive outlooks outnumbering a few scattered negative
outlooks, and no rating downgrades. On the upgrade side of the ledger, Ares Capital, Blackstone
Private Credit, Blackstone Secured Lending, Golub Capital, Blue Owl Capital and Sixth Street
Specialty Lending have had upgrades. Meanwhile, negative rating actions have been limited to
outlook changes, with FS KKR and Prospect Capital as the most notable.

The ticket for entry among BDCs planning to issue bonds seems to be a triple-B range credit
rating. We think most BDCs would undertake a range of significant actions to defend their
investment-grade ratings, as that helps limit borrowing costs, thereby feeding into wider margins.

25
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 Dec. 4, 2024

Figure 19: Median Credit Ratings and Changes (2024)

Depending on how credit markets unfold into 2025, BDC bonds may still have scope to tighten,
though their success since 2023 makes each additional basis point of relative tightening harder
to come by. We selected three benchmark bonds of the largest BDCs with high Bloomberg
Liquidity Assessment Scores in the belly of the curve and compared them against the Bloomberg
Finance Baa Index. Year-to-date, the bonds issued by Ares Capital, Blackstone Private Credit and
Golub tightened by 56 bps. Meanwhile, the Baa Finance Index tightened by 39 bps.

Year-to-date, the average spread pickup for these BDC bonds compared with the Baa Finance
Index is 64 bps, while the current differential is 47 bps. If the benign consensus outlook comes to
pass, then carry alone could help BDCs out-deliver peer finance bonds.

Figure 20: BDC Benchmark Spread Moves (Bps)

The broad universe of BDC bonds trades in close proximity to double-B financials rather than the
triple-B curve (see Fig. 21 below), despite BDC ratings being in the triple-B range. Larger BDCs

26
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 Dec. 4, 2024

affiliated with large, A-range alternative managers such as Ares and Blackstone trade with the
lowest spreads, yet these are still midway between double-B and triple-B financials, despite
carrying the nameplate of their eponymous advisers. If market conditions remain fairly steady,
then the gravitational pull of the triple-B financial curve, combined with favorable momentum
from recent performance, may pull BDC spreads tighter.

Yet BDCs are a relatively new high-grade sector, and investors are still settling in. Their spreads
tend to be volatile, and many are managed by entities seen as competitors by some investors.

Figure 21: BDC Bond Universe Relative Value (Bps)

Source: Bloomberg Intelligence

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 Dec. 4, 2024

Section 8. Banks: Partners and Rivals

Private Credit Angles for Share
Private credit managers wield significant fee possibilities by continuing to penetrate various
segments of the fixed-income market, though competition with traditional banks is evolving.
Banks are returning to the leveraged-loan market, while partnerships such as Citi with Apollo
highlight the collaboration efforts where capital can be deployed efficiently. Trump's election win
may usher lighter bank capital rules, which could intensify competition. Private credit has been
and will remain a key theme for asset growth, including insurance and asset-based finance (ABF).
Banks have been more successful defending against private credit taking share so far this year.

8.1 Breadth, Size of Credit Market Offers Potential

The fixed-income market offers diverse investment structures and profiles, presenting a unique
opportunity for private credit managers, and though not all are directly addressable, some
segments may be more suitable for certain purposes and managers. Penetration of these markets
may be quite low as a share of wallet, yet they offer significant fee possibilities for alternative-
asset managers.

Loans and leases on bank balance sheets total roughly $19 trillion (see Fig. 22) and make up
almost half the credit market, with about two-thirds coming from the US. Corporate bonds are
about $13 trillion, private credit holds $1.6 trillion, non-bank leveraged loans $2.1 trillion and asset-
based financing $5.2 trillion.

Figure 22: Credit Market ($ Billion)

US bank loans the

biggest piece of
credit market at
$12.5 trillion

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 Dec. 4, 2024

Sponsor-backed borrowers continue to make up the majority of new-money leveraged-loan

borrowing, with Bloomberg data showing 80% of new leveraged-loan issuance since the start of
2021 supported private equity-backed companies, rising to 82% so far in 2024. At the same time,
LCD Pitchbook data suggest private credit funded 87% of buyout values in 1H, up from 61% in
2019. Banks are returning to the market, mostly through refinancing, keeping it competitive, yet
private credit’s share remains meaningful, with deployment activity picking up during 2024 and
set to continue into 2025, while dry powder has remained relatively flat since 2021, based on
Pitchbook data.

Preqin projects direct lending to nearly double from 2023-29. Others, like BlackRock, are even
more optimistic, expecting the industry to reach $3.5 trillion in that span.

Figure 23: Bank Share of Leveraged Loans Receding

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8.2 Bank Capital and Regulatory Changes Open Paths

Though private lenders remain well positioned to compete with traditional commercial-lending
channels, momentum could be more balanced as the syndicated-loan market becomes more
active. Origination share and bank collaboration might be targeted over time, while acquiring
bank loan portfolios and synthetic risks transfers could accelerate this trajectory.

Stricter bank capital requirements may mean less risk appetite, supporting borrowing demand
from the alternative lenders. Softer Basel III Endgame requirements might still leave a mark, as
prior regulations, including Dodd-Frank, have accelerated the pickup in nonbank lending share.

Figure 24: Banks Taking Back Loans Through Refinancing

8.3 Asset-Based Finance Is a Private-Capital Opportunity

Apollo, KKR, and Blackstone lead peers with the most insurance-related assets and are keying in
on asset-based financing to spur growth, with KKR and Integer Advisors valuing the segment at
$5.2 trillion in 2022 and projecting it reaches $7.7 trillion by 2027. Apollo increased its target to
over $275 billion of origination volume annually by 2029, from its original $150 billion goal, and
has originated $194 billion in the past 12 months, much of which is from its platforms.

The US accounted for 57% of the addressable market and Europe for 19%. Private asset-backed
financing share grew to 47% in 2022 vs. 36% in 2006. We suspect the managers will focus on
secured financing, including autos and certain personal loans, with meaningful involvement
already.

Ares should continue to benefit as non-traditional lenders gain market share (see Fig. 25), though
we note that banks have started to return in 2024, following extra caution exercised amid the
uncertainty and funding pressure in 2023. Direct lending, which accounts for 46% of the
segment, should be driven by fundraising demand and investment opportunities.

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 Dec. 4, 2024

The Financial Stability Board's global monitoring report on nonbank financial intermediation
showed a fall in the share of such lending in 2022 to 47%, though it continues to rise post
financial crisis and likely shifted out of banks last year. Regional bank hurdles may add
opportunity in private middle-market and asset-based lending.

Figure 25: Nonbank-Lending Growth

Nonbank share of
lending increased
steadily

8.4 What’s at Stake for Bank Capital Levels?

Less capital constraints for banks could sharpen competition with private credit lenders. Bank
regulators have been working on tougher bank capital rules, but the regulations could be further
diluted or tabled altogether under the second Trump administration. Under the prior proposal,
banks with more than $100 billion in assets would have faced an estimated 16% increase in capital
requirements, with the brunt felt by the eight largest lenders (an anticipated 19% gain in CET1).
Yet a new plan laid out by Fed Vice Chair of Supervision Michael Barr suggests a forthcoming re-
proposal will reduce that to a 9% increase for the largest banks, in line with our expectations of
8%. Though specifics are still to come, Barr highlighted changes to the rule's operational, market
and credit-risk provisions, as well as lower risk weightings for consumer-facing products like
residential real estate.

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Figure 26: Capital and Liquidity Ratios 1Q23-2Q24

The last remaining piece of Basel III, known informally as the Basel III Endgame, would alter
capital levels for US banks as regulators recalibrate risk-weighting of assets and restrict internal
models used to calculate credit and operational risks. The July 2023 proposal from the Fed, FDIC
and the Office of the Comptroller of the Currency would implement the US version of an
internationally agreed-upon consultation. It also came partly in response to bank collapses, such
as California's Silicon Valley Bank and New York's Signature Bank, as regulators expanded the
scope to include all banks over $100 billion in assets rather than just the largest. Yet significant
changes are expected if regulators repropose portions of the rule.

8.5 Regional Banks May Attract Private Credit Rivals

Private credit has yet to significantly infringe upon regional banks' lending, despite Blackstone
and Apollo pegging it as a $30-$40 trillion opportunity. Banks with lending-only relationships and
a leveraged-loan focus may see more rivalry, but such loans are less than 2% at Citizens, Keycorp
and Fifth Third. Keeping customer relationships is key, with diversity helping PNC, Fifth Third and
U.S. Bancorp defend share.

With private credit largely focused on leveraged loans offering longer terms and weaker
convenants, regional banks have yet to view nonbank lenders as direct competitors, but we could
see a change as private credit grows and lowers its cost of capital. As this occurs, private capital
may shift its focus more to investment-grade credits, which could spur competition for regionals.
Banks with loan-only relationships could see their client base erode, while larger regionals like
PNC and Fifth Third with more diverse product offerings may continue to succeed.

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 Dec. 4, 2024

The current lack of competition is evident with an average bank yield at 6%, about half that of a
private-credit loan on the high end.

Modest growth in leveraged-lending commitments within the OCC's Shared National Credit
Program could reflect the direct competition from private credit. Commitments rose only 2.7% in
2023 vs. 10.8% in 2022. Leveraged-loan commitments represent 46% of the total program, a
meaningful share, so smaller banks that are more reliant on SNC participation to expand loans
could see weaker performance as a result. We think a significant portion of the largest regionals'
leveraged-loan exposure is within SNCs. Huntington has said 2.3% of its total is leveraged loans,
while 73% of its leveraged portfolio are classified as SNCs.

SNCs are loans or commitments at or above $100 million and are shared by three or more parties
(see next figure).

Figure 27: Commitment Growth Slows

Regional bank management teams appear mixed about current rivalry from private credit. PNC
says nonbanks aren't a threat and private credit is operating in higher-risk areas where it's
unwilling to participate. Regions eyes looming private-credit competition, but doesn't see it
infringing quite yet. The Southeast lender noted differentiators that banks offer vs. private credit
include greater available leverage, longer terms, more loan proceeds and fewer covenants. U.S.
Bancorp sees more partnership opportunities in areas like foreign currency and derivatives.

Fifth Third noted the most overlap in leveraged loans, where it's less exposed. In the middle
market, private credit is using a unitranche structure to consolidate senior and subordinate debt,
without the same level of due diligence Fifth Third would use.

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Competition from private equity, active prior to the pandemic, is also a risk. In 2016-19, banks'
business loans grew at a 4.5% compounded annual rate, below GDP of 4.7%. Banks like M&T
cited loan payoffs due to PE takeovers of middle-market customers, which then paid down bank
loans and replaced the debt with more expensive leverage. We hear less of this competition at
present, but with the Fed shifting to a lower-rate backdrop, a return of PE volume could spur
additional loan competition for banks. PE deal count in 2Q was down 51% from the record in
4Q21 but up 5% vs. the prior year.

Private capital takeover of middle-market firms can also hollow out regionals' deposit bases and
fee income as sponsors shift banking relationships of portfolio companies to larger banks. PNC's
partnership with TCW addresses this.

Figure 28: Private Equity Deal Activity

Private equity deal

value ticked higher
in the past year; hit
peak in 2021

8.6 Bank-Private Credit Tie-Ups Help, Don’t Transform

A spate of partnerships between banks and private credit managers -- like Citi with Apollo, and
JPMorgan with FS -- in which the former funnels deals to the latter, helps complement managers'
origination and distribution capabilities and could support further market share gains. While they
may not have far-reaching implications for well-established BDCs sitting within these platforms,
we expect more tie-ups as lenders embrace collaboration.

Unions between banks and private credit managers take different forms (see Fig. 29, next page),
though most appear to leverage banks' origination and distribution capabilities with BDCs'
available capital, as in Citi's tie-up with Apollo, and JP Morgan's with FS Investments. Other
collaborations will create new advisor entities, like Wells Fargo and Centerbridge's spurring the
launch of a new nonsponsor lending-focused BDC. Barclay and AGL Credit's creation of AGL
Private Credit, PNC Bank's with TCW Group are other examples. Societe Generale and Brookfield
will launch a joint fund.

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In Mizuho's collaboration with Golub Capital, the bank will sell the latter's products in Japan,
expanding distribution. Citi and Apollo’s agreement reportedly focuses on noninvestment grade
credit, but as other arrangements target higher-quality, non-sponsored deals, BDCs may not be a
primary destination for such assets.

Though there certainly is some overlap with deals that banks pursue, most BDCs that we cover
already have robust deal engines, and selectivity rates of 3-5% suggest that they produce
sufficient flow to prioritize credit quality. Fee cannibalization also presents a risk.

Figure 29: Recent Bank - Private Capital Tie-Ups

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Section 9. Credit-Quality Risks

Borrower Quality Main Challenge to Private Credit Growth

Credit quality and borrowers' cash flow appear to be the largest risks facing private credit stability
and growth, as flagged by 43% of respondents in our survey. Most see adequate underwriting
standards across the industry yet also expect alternative credit to underperform public markets in
an economic downturn.

9.1 Credit Quality, Regulation Pose Threats

After credit quality, the potential for stricter regulation was viewed as the next-largest risk to
private credit, at 29% in our survey, while investors also identify competition from banks as a
concern. Fund managers seem less worried about that, which could be because they expect
more collaboration with banks.

While economic risks remain, declining interest rates foster cheaper funding for borrowers and
will likely ease some key concerns. Many global regulators have called for more rules and
transparency in private markets, but the US Supreme Court in June struck down the SEC's
attempt to regulate private funds.

Borrower cash flow, identified in an International Monetary Fund report, is seen as a risk to private
credit by 71% of respondents, with 45% flagging it as the primary risk and another 34% as the
secondary. Threats associated with liquidity mismatches constitute the next biggest focus, as
noted by about 60% of survey participants, with leverage and asset valuation factors following.

The risks flagged by the IMF in Fig. 30 sparked a few surprises in the survey. About 35% of
respondents saw leverage as a primary risk, though managers typically don't employ meaningful
amounts of leverage at the fund level. On the other hand, only 24% identified asset valuations as
the primary risk, yet 41% see them as secondary, which may appear benign, as credit quality and
transparency are highly scrutinized.

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Figure 30: IMF-Identified Risk Factors

9.2 Underwriting Appears to Be Adequate

Over half of private credit investors, managers and bankers see current underwriting standards as
Borrower cash flow adequate, 30% consider them easy and only 13% think they are too tight. Investors more often
cited as biggest feel some standards are too easy, likely preferring additional protections because of the nature of
risk their position in the ecosystem, while most bankers are eager to lend and think standards are
adequate. We expect differences in credit performance between managers who have been strict
in underwriting policies and those who have been more loose.

Over 50% of respondents say that private credit investments would experience similar losses to
those in public markets in an economic downturn, while 40% say private credit could
underperform. The assessments may be tested as the market battles economic uncertainty,
though an easing interest rate cycle could provide some breathing room. Private investment
managers are the most optimistic cohort about investments performing at least in line with public
markets, while just 8% of all respondents say private could perform better.

Our survey was administered to 137 participants by Guidepoint from Sept. 3-24 and asked
respondents to answer a wide range of questions about the future of private credit. The survey
included a diverse group of financial professionals familiar with the industry, with 36% coming
from alternative funds, 31% limited partners and fund investors, and 31% bankers and lenders.

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Portfolio manager, at 12% of respondents, was the most common job title, followed by investment
director (11%), managing director (10%) and investment adviser and CIO (9% each).

The group was largely based in North America, at 81%, with 9% in each of Asia and Europe.

Figure 31: Survey Demographics

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 Dec. 4, 2024

Section 10. BDC Risks and Rewards

Precarious Point in Credit Cycle a Risk to Portfolios

BDC disclosures, which provides key visibility into private credit asset quality, particularly within
direct lending, shows a growing performance bifurcation, with peers that have more robust credit
platforms and defensive portfolios seemingly positioned better. Slightly higher nonaccruals and
continued loan losses may remain the trend for business development companies and direct
lenders alike, as a host of factors create an uncertain credit-quality backdrop. Lower rates and
Ebitda growth mean interest-coverage ratios have likely troughed, and defaults remain low,
though restructurings often generate losses. Consensus, where available, sees a slight increase in
nonperforming asset rates, peaking in 1H25 at about 1 percentage point higher than the current
pace.

10.1 BDCs Diverge as Robust Platforms Dodge Creeping Stress

BDC’s with better workout abilities, stricter underwriting and more defensive portfolios will likely
fare better amid this unsettling credit backdrop. Nonaccrual rates have been managed through
restructurings, contributing to elevated net realized losses of 1.5-2%, as well as via payment-in-
kind -- now featured on 17% of loans. Nonperforming debt may peak at about one percentage
point higher than now in 1H25.

Within our coverage universe, Blackstone Secured Lending, Morgan Stanley Direct Lending and
Goldman Sachs BDC have among the highest share of their portfolio in first-lien loans (as
illustrated in Fig. 32 on the next page), though the last was caught offsides by its recurring
revenue software loan exposure. Large-scale operators with extensive direct lending platforms,
including Ares Capital and Blue Owl Capital may also be better positioned in a tougher
environment.

BDCs across the group are being more proactive in their management of underperforming loans.

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 Dec. 4, 2024

Figure 32: Portfolio Capital Structure

First lien loans make

up an average 80%
of BI peers’
portfolios

Nonaccrual ratios are gradually ticking up on average for BDCs in our peer coverage, and
consensus, where available, implies a peak in early 2025 about 1 percentage point higher than
today's rate. This translates to a manageable low-single-digit headwind to earnings across our
coverage, though peers may incur losses as they manage down these loans. Nonperforming
loans are about 2.7% of portfolios on an amortized cost basis, and about 1.3% of fair value, with
the average nonaccrual loan marked at about 50 cents on the dollar. Recent notable nonaccrual
additions seem to be concentrated in recurring-revenue software loans.

More than 60% of nonaccrual loan content matures in 2026-28, we find, giving lenders ample
time to work with borrowers, while 25% mature in 2024-25, likely posing more immediate risk of
losses.

After 525 bps of base rate hikes in 2022 and 2023, a few quarters of tepid economic growth and
some large US regional bank failures, many private-credit market observers expected a tsunami
of leveraged borrower bankruptcies. Yet our analysis of public data from BDCs indicates that this
simply hasn't happened. Yes, credit problems have ticked up at the BDCs we cover, and this
trend in nonaccruals bears watching, though the surprise here may not be that problems are
rising, rather that they remain so low.

Non-accruals may continue to trend up, as they tend to be a lagging indicator, and several large
BDCs are new and their loan portfolios aren't yet seasoned. The macroeconomic backdrop,
though, suggests only moderate additional stress.

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 Dec. 4, 2024

Figure 33: NA as % of Cost (T); NA Maturity Wall (B)

Elevated losses, more reliance on payment-in-kind and other restructuring tools have likely
helped keep a lid on bad loans. In some cases, these tactics may prove only a temporary solution,
and we anticipate some issues to reemerge.

BI-tracked BDCs have experienced heightened net realized losses in recent periods (Fig. 34),
averaging an annualized 1.5-2% of portfolio in recent quarters. Losses may result from
restructurings, which seem to have increased industrywide, often resulting in markdowns or write-
offs of previously unrealized depreciation, and weigh on net asset values, though don't impact
net investment income.

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 Dec. 4, 2024

Figure 34: Annualized Realized Gains/Losses as % of Cost

10.2 Payment-in-Kind Feature on 17% of BDC Loans

Payment-in-kind rates are increasing across the BDC peer group, partially in response to pressure
on borrowers' cash flows brought on by high-for-long interest rates. Our analysis of the schedule
of investment data shows about 17% of loans within BDC portfolios we track have an active PIK
feature, up from 11% in 3Q22, though down 1% sequentially. PIK's share of income is substantially
lower than this level though, as many loans pay only part of the coupon this way.

Lenders appear increasingly willing to offer PIK features to borrowers, partially attributable to an
effort to win business from the broadly syndicated market, though we anticipate a subset has
gone to support borrowers struggling to service debt in a higher-rate environment. Toggling to
PIK temporarily supports debt that might otherwise be marked as nonaccruing.

While the rise in non-accrual rates has been modest, payment-in-kind (PIK) investment income as
a percent of the total has been elevated since the pandemic emerged in 2020, and there is no
sign yet that the PIK rate will decline. As of 3Q, the PIK rate for the 32 high-grade BDCs we track
increased to 7.2% from 6.7% in 2023 and less than 5% in 2019. We see this as a possible yellow
flag that warrants vigilance, as further increases in the PIK income rate could translate to actual
impairment losses.

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 Dec. 4, 2024

Figure 35: Payment-in-Kind Rate

There's a wide array of performance, with notable BDCs such as Prospect Capital (16.8%) and
Blue Owl Capital (11.4%) above 10%. Private lenders have scope to undertake differing
underwriting and remediation approaches if stress arises, so a wide range of outcomes isn't a
surprise, though the upward trend bears watching.

10.3 Share of Distressed BDC Loans Decreases

Our analysis of portfolio position data across 16 of the largest BDCs shows slightly declining levels
of loans priced at distressed levels. This suggests the absence of broad-based credit
deterioration. Loans priced below 80% of cost declined to 1.4% of total portfolio fair value on
average, down from 2% a year ago and more than 6% in 1Q20.

Prospect Capital Corporation and Goldman Sachs BDC have more than 3% of portfolio value, and
more than 5% of portfolio cost, marked at these levels, signaling increased risk of realized losses
relative to peers.

A mix of factors leave the credit backdrop unclear, casting uncertainty on the path of private
credit quality and performance. Interest coverage should recover from troughs as rate cuts
reduce the burden on borrowers, yet election and geopolitical worries loom. Business
development companies, and direct lending more broadly, may continue restructuring debt to
address underperforming credits.

Defaults across private credit, as tracked by the Proskauer Default Index (Fig. 36, next page),
declined in 3Q as the sector continues to see relatively contained fallout from a period of higher
interest rates. Lenders aren't quite in the clear yet though, as stress may still be materializing,
though a drop in base rates should help shore up credit quality. Geopolitical and election

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 Dec. 4, 2024

concerns, as well as potentially lagging effects from higher rates, represent ongoing risks to
credit quality.

The default index declined to 1.95% in calendar 3Q from 2.71% in 2Q, though is up slightly from
1.41% a year prior. Default rates decreased sequentially for the largest and smallest borrower
cohorts but rose for those with Ebitda of $25-$50 million.

Figure 36: Proskauer Default Index (by Ebitda)

The divergence between traditional leveraged-loan defaults and distressed exchanges appears
to be widening. PitchBook data show a steady rise in the latter, in which lenders extend a lifeline
to troubled borrowers by granting concessions on certain loan terms, to 4.21% of the leveraged
loan universe in September, from 3.17% a year earlier and less than 2% in early 2023. This appears
to be keeping a lid on bankruptcy-related defaults, which have declined over the prior year. This
dynamic looks consistent with how BDC peers we track are choosing to manage
underperforming loans.

Sentiment points to a relatively stable leveraged-loan default rate, with Federal Reserve rate cuts
in the queue likely alleviating interest-coverage-ratio pressure, yet further restructurings and
amendment activity may continue.

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 Dec. 4, 2024

Figure 37: US Loan Defaults

Interest coverage ratios may have troughed in 2Q or 3Q, we believe, at an average of around 4.4x
Ebitda, per PitchBook data, as Federal Reserve rate cuts ease pressure on interest burdens at
floating rate borrowers. This bodes well for the default outlook, though there are other factors at
play. Ebitda growth has been relatively strong across the likes of midmarket borrowers that BDCs
and direct lenders mostly target, helping to blunt the effect of higher base rates. Still, interest
coverage declined from nearly 6x in 3Q22.

PitchBook data show about 8% of borrowers with a coverage ratio below 1.5x as of calendar 2Q
(Fig. 38).

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 Dec. 4, 2024

Figure 38: Leveraged Loan Interest Coverage

Distressed ratios in below-investment-grade corporate debt have declined to around 5% from a

local peak above 30% reached in 2022, when the rate-hike cycle commenced, though they're
potentially benefiting from lenders' proactive management of underperforming credits.

10.4 Raters Push Back to Neutral for Private Companies

Actions from raters for private high yield companies moved back toward neutral territory in
September, with downgrades outnumbering upgrades by just 1.16x. Across the broader
corporate space, ratings companies haven't taken a stance via actions in recent months, as the
upcoming election and geopolitical uncertainty go head-to-head with rate-cut hopes and strong
economic data. The upgrade-to-downgrade ratio for publicly listed companies has also shifted
toward an impartial level at 1.3x, down from 4.2x in July.

Ratings-company outlooks and reviews for high yield debt point to potential for positive actions
over the intermediate term.

Sponsor-backed borrowers benefit from the resources and backing of their private equity owners,
likely supporting default rates below those of non-sponsor-backed borrowers. Sponsors hold
significant capital and operational resources to support portfolio companies, providing a lifeline
to borrowers in distress. Most BDCs in our peer group largely provide capital for such deals --
around 85-90% at Ares Capital and Blue Owl Capital, and likely similar at most large peers --
potentially mitigating the impact of a worsening credit environment, if history serves as a guide.
Oaktree Specialty Lending notably maintains a focus on non-sponsor-backed borrowers, as may
Main Street Capital Corp.'s lower-middle-market segment.

In September 2020, sponsor-backed defaults were 2.6%, and non-sponsor-backed defaults 5.7%,
per PitchBook data.

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 Dec. 4, 2024

Figure 39: Sponsor vs. Non-Sponsor Backed Defaults

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 Dec. 4, 2024

Section 11. Company Impacts

Private Credit Demand Leads Growth

Demand for private credit investment strategies has driven inflows and growth for the largest
alternative managers. They are gathering a large portion of the new business in the market, which
is expected to double in five years. Insurance expansion and ownership and product innovation
are accelerating the growth benefits. Ares and Apollo are most focused on credit strategies, while
Carlyle and TPG expanded through acquisitions. Credit became the largest segment for
Blackstone by assets, as KKR is rapidly expanding the strategy, though insurance assets are also
gathering. Direct lending, asset-based finance and liquid credit strategies are significant
opportunities to expand stable fees for the managers, which also operate the largest public and
private business development companies (BDCs).

11.1 Apollo The Largest, Fast Growing Credit Manager

Company Outlook: Apollo Global's credit- and insurance-focused inflows are aimed at
differentiating the company as exit delays ease. Ownership of insurer Athene shifted attention to
retail and yield assets, while permanent-capital vehicles Athene and Athora boost its view of
managed-asset growth. Several flagship funds have entered a harvesting cycle, yet realizations'
support of adjusted net income trail historical levels. Revenue may be bolstered by fee-related
earnings and managed assets. Annual gains could normalize to 15-20% in FRE, but slow to mid-
single digits in spread-related earnings, before returning to about 10% growth.

Private Capital Impact: Apollo’s ownership of annuity provider Athene accelerates its asset
gathering ahead of peers, with growth expected to exceed 20% annually. Most of these assets are

20% invested in the private credit markets, hastening its growth and penetration of fixed-income
Annual FRE Growth Goal markets, which it sees as a “fixed-income replacing cycle.” It plans to double Athene’s invested
assets over five years to $600 billion. The manager also stands to benefit from the expansion of
$600 Billion origination, as it gets deeper into asset-backed markets, driving management and transaction
Athene’s Insurance Assets
Goal fees, as it targets a near-doubling of annual originations to $275 billion.

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 Dec. 4, 2024

11.2 Ares Leads Global Direct Lending Race

Company Outlook: Ares Management's focus on credit, dominated by direct lending in the US
and Europe, is a key catalyst for market-share gains as the private equity industry's managed
debt could double in five years. A shift to lower rates may affect mostly variable-rate loans, yet
returns could remain strong even if rates drop modestly. The revenue stream is stable and
growing, with about 85% from fees. The GCP deal will expand assets by 10%, focused on Asia
and data centers. Ares' bolt-on acquisitions might drive cross-selling synergies -- boosting fees
and profitability -- and open up faster-growing areas such as Asia, retail and insurance.

Private Capital Impact: Ares is well positioned to maintain its leadership as the largest global
direct lender. The manager anticipates reaching $750 billion of assets over the five-year cycle,
$750 Billion which is likely an understatement given demand for private credit, large manager
Asset Target
concentration, though there are questions along the way. As credit assets are base-fee centric,

72% Ares has clear visibility to 16-20% annual fee-related earnings growth, while expanding
Of Assets in Credit performance-fee momentum for waterfall funds could aid realized income. It operates the
largest publicly traded BDC, Ares Capital Management, which gives it a leg-up on retail assets,
while targeting an expansion of wealth management to $100 billion.

11.3 Blackstone’s Momentum Tilts to Credit

Company Outlook: Demand and diversification can support Blackstone's fee earnings amid a
tougher cycle, helping it to overcome fundraising delays. Its valuation has remained pressured
even as the firm reached its goal of $1 trillion in assets. Realizations might remain slow but are
opening up, as could deployments. Double-digit organic growth in managed assets, before
fund distributions, may not return until 2024, as perpetual- and retail-asset expansion have
slowed. Rising fee-earning managed assets can more than offset potential concessions, while
capital deployment clears the way for performance fees. S&P 500 inclusion should drive
passive-investor demand.

Private Capital Impact: Blackstone’s faster-growing private credit and insurance business

$355 Billion became the largest segment, accounting for about one-third of $1.1 trillion of assets to overtake
Credit & Insurance Assets its leading private equity and real estate operations. Although the manager isn’t interested in
owning insurance operations, it has successfully gathered $221 billion of related assets through
$62 Billion various partnership arrangements. Blackstone operates the largest private BDC, a $62 billion
Largest Private BDC BCRED, that continues to gather assets through wealth channels, where it leads peers. It is
expanding its asset-backed finance capabilities.

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11.4 Brookfield’s Built Credit Into Its Biggest Business

Company Outlook: Brookfield Asset Management's split from its capital-intensive parent
illustrates the fee-centric, asset-light structure that can help justify its above-peer earnings
multiple, and its positioning for broader index inclusion, which may provide a valuation boost.
Growth goals -- including roughly doubling fee-bearing capital and fee-related earnings over
five years -- appear achievable despite uneven progress, yet may continue to require support
from Brookfield Corp., which should provide a boost in 2024. Its experience operating real
assets underpins a robust infrastructure and renewables portfolio amid secular tailwinds.

Private Capital Impact: Brookfield expects credit to be its fastest growing business line, with an
ambitious goal of more than doubling its $245 billion fee-bearing capital in the unit to $590
billion by 2029. It’s invested heavily in the segment in recent years, particularly in its Brookfield
45% Wealth Solutions insurance business, where it benefits from managing Brookfield Reinsurance
Credit AUM as a
assets, exemplified by its recent deal for $50 billion of AEL assets. It now owns more than 70%
percentage of the total
of credit manager Oaktree, after its initial acquisition in 2019.
$200 Billion
Targeted 5-Year Insurance
Solutions AUM Growth

11.5 Acquisitions, CLO Business Bring Credit to Carlyle

Company Outlook: Carlyle Group's fee-related earnings are improving following a
compensation shift, while deal activity, private equity and credit fundraising could pick up. The
company should deliver on most 2024 fundraising targets, on 2H momentum from several
asset-boosting transactions. Carry-accrued balances of $2.8 billion have been aided by resilient
fund performance, as they're being rebuilt after a realignment charge. Expanding the credit unit
-- which reached about 43% of managed assets -- is a priority, aided by its continued insurance
build-out.

Private Capital Impact: Carlyle caught up in key growth of private credit, with recent
acquisitions and the buildout of insurance expanding the strategy’s presence to 43%. It is
lighter than peers in insurance, yet rapidly catching up through a hybrid approach, with more
43%
Of assets in credit assets to be added through its Fortitude operation. It’s also developing retail products. Like
rivals, demand for private credit products has rewarded Carlyle with the most inflows, while the
$83 Billion CLO business rebounded. Liquid credit, which accounts for $83 billion of managed assets, is in
Liquid Credit CLOs high demand as investors seek flexibility.

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 Dec. 4, 2024

11.6 Angelo Gordon Brought Leading Credit Growth to TPG

Company Outlook: TPG is maintaining healthy private equity fundraising in 2024, which could
gain in 2025, and leading credit inflows that are driving managed assets and fee-related
earnings (FRE). The Angelo Gordon acquisition expanded assets by more than 50% and gave
TPG a significant credit presence, diversifying from tech-focused private equity. TPG's FRE
margin could struggle to reach 45% until 2H25 from a deal downshift to 40%. Before the
transaction, the company had an 80% private equity managed-asset concentration, with 36% in
tech, higher than large publicly traded peers. Asia and ESG platforms could be fast-growing
catalysts.

Private Capital Impact: A 2023 acquisition of Angelo Gordon put TPG on a footing closer to its
large, publicly listed peers. Credit now accounts for 29% of the manager’s assets, and inflows in
29% this strategy dominated 2024 growth. As TPG benefits from secular private credit trends and
Assets in credit
business diversification across middle-market direct lending, structured credit and specialty
finance, as well as credit solutions, its key growth potential depends on the ability to cross-sell
10% to clients, as there was just a 10% investor overlap at the time of the deal.
Overlap between equity
and credit clients

11.7 Insurance Ownership Builds KKR’s Credit

Company Outlook: KKR complements its private equity and credit operations with a capital
markets unit and uses its balance sheet for strategic investments, adding risk and fee variability.
Full ownership of Global Atlantic aids profit as it expands the business's insurance assets. The
company accelerated fundraising in 2024 after beating its previous two-year goal, before a
pause. Fee-related earnings are pacing to double-digit growth this year as KKR focuses on Asia,
infrastructure, real estate and permanent capital. It's reaching a broader investor base and
targets 30-50% of new capital from retail clients.

Private Capital Impact: KKR expects Global Atlantic insurance assets to double over five years,
from $187 billion at 3Q, of which $140 billion was credit. This fully owned business is a primary

43% driver of credit assets, which together with liquid strategies account for 43% of the manager’s
Assets in credit assets. KKR is leaning into asset-based finance opportunities, with 19 origination platforms, as
related assets reached $66 billion. Its credit business is light on direct lending and dominated
2x by leveraged finance, which includes CLOs and is spread across US and European direct
Global Atlantic assets lending.
growth goal

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 Dec. 4, 2024

11.8 Ares Capital Corporation Benefits From Platform

Company Outlook: Ares Capital, the largest publicly traded business development company,
is holding up well amid pockets of credit stress in the industry and despite holding more junior
debt than peers. Nonaccruals could stay low, though managing potential bad loans might
weigh on investment performance. Ares' dividend coverage is strong, and spillover income
helps support its distribution stability. The BDC's premium valuation likely reflects its ability to
generate growth as well as its scale, credit and portfolio-management capabilities derived from
its ties to investment adviser Ares Management.

Private Capital Impact: Ares Capital Corporation may be the cornerstone of Ares
Management’s US direct lending efforts and should benefit from the parent’s expansion. The
vehicle should continue to exhibit measured growth as it deploys capital raised from ongoing
$25.9 Billion equity issuance, driven by extended demand for its strategy, into attractive risk-reward
Of investments
opportunities. Its inclination and ability to invest across both the lower and upper-middle
market, as well as in more junior securities, promotes strong economics and hasn’t weighed on
11.7% its above-average credit results.
Investment yield

11.9 Blue Owl Capital Corporation Rising to Top of Class

Company Outlook: Blue Owl Capital Corp. ranks among the blue-chip business-development
companies that can continue to benefit from the shift in middle-market funding to private
lenders, gaining efficiencies and competitive advantages from parent Blue Owl's extensive
direct-lending platform and added scale from the OBDC III merger. However, spreads at the
top of the middle market where it operates are tightening, while base rate and credit risks pose
broad industry challenges to earnings growth and portfolio resilience. Recent dividend hikes
have helped to close the valuation gap with other large externally managed peers.

Private Capital Impact: Despite a relatively short track-record compared with many BDC
peers, Blue Owl Capital Corporation can continue to reap the benefits from the ongoing shift in
middle-market financing to private markets. Its positive results and the increase in retail
$13.5 Billion
Of investments penetration should support demand for the vehicle, while a growing sponsor-relationship
network supplies deal flow. The recent high-profile restructuring of Pluralsight debt highlights
76% broader concerns over private credit quality yet demonstrates the broad capabilities managers
First-lien debt have to work out underperforming credits.

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 Dec. 4, 2024

11.10 FS KKR Capital’s Working Through Credit Challenges

Company Outlook: FS KKR Capital is actively restructuring and marking down
underperforming loans, which have declined as a share of the total portfolio but remain near
the top of their peer group as credit issues nag. The backing of KKR's credit platform provides
scale, access to deal flow and, perhaps most importantly, portfolio management and workout
capabilities -- a competitive advantage over smaller rivals. Business-development companies
are facing a less constructive rate and credit environment, weighing on supplemental dividends,
though regular distributions remain well-covered.

Private Capital Impact: FS KKR Capital Corporation benefits from investment sourcing
capabilities from the larger KKR network, though recent credit quality challenges highlight some
of the risks to private credit that respondents cited in our survey. It might be an outsized
$13.9 Billion
beneficiary of the expansion of alternative credit managers into ABF, as it’s a particular focus for
Of investments
KKR, and the portfolio allocates more than 15% to this area. The ability to limit further downside
through the remainder of the credit cycle could be key for investor perception.
3.8%
Nonaccruals at portfolio
cost

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 Dec. 4, 2024

Bloomberg Intelligence Research Coverage

Bloomberg Editorial and Research:
John Micklethwait, Editor-in-Chief; Reto Gregori, Deputy Editor-in-Chief

Research Management
David Dwyer, Global Director of Research Paul Gulberg, Director of Americas Industry Research
Drew Jones, Deputy Global Director of Research Catherine Lim, Director of APAC Industry Research
Sam Fazeli, Director of Global Industry Research Sue Munden, Director of EMEA Industry Research
Alison Williams, Director of Global Strategy Research Frank Jacobs, Global Chief Operating Officer

Content Management
Tim Craighead, Global Chief Content Officer Mariam Traore, Research Digital Content Specialist
Karima Fenaoui, Research Content Officer, Communities & EM Matthew Bloxham, Global Head of Alternative Data & Analytics
John Lee, Research Content Officer, APAC Brian Egger, Global Head of Financial Modeling
Renato Prieto, Research Content Officer, FICC Donna Weston, Co-head Global Research Editorial
Roger Thomson, Research Content Officer, Americas Douglas Zehr, Co-head Global Research Editorial
Rod Turnbull, Research Content Officer, EMEA

Equity Strategy
Gina Martin Adams, Director of Equity Strategy Research
Markets Funds
Christopher Cain, Quantitative Analysis, US Eric Balchunas, Exchange Traded Funds, Global
Michael Casper, Small Caps and Sectors, US David Cohne, Mutual Funds, Global
Marvin Chen, China and North Asia Henry Jim, Exchange Traded Funds, Europe
Nitin Chanduka, Emerging Markets, India Athanasios Psarofagis, Exchange Traded Funds, Americas
Laurent Douillet, Europe James Seyffart, Exchange Traded Funds, Americas
Anthony Feld, Technical Analysis, Global Rebecca Sin, Exchange Traded Funds, APAC
Kumar Gautam, Emerging Markets, Global Thematic
Gina Martin Adams, Global Breanne Dougherty, Global
Wendy Soong, Americas Andrew Silverman, Tax Policy and Corporate Actions, Global
Sufianti Sufianti, Emerging Markets, ASEAN Shirley Wong, APAC
Gillian Wolff, Global Lu Yeung, Accounting, Global

FICC Strategy
Noel Hebert, Director of FICC Strategy Research
Markets FX and Rates
Erica Adelberg, MBS, Americas Audrey Childe-Freeman, FX, G-10
Negisa Balluku, Litigation-Bankruptcy, Americas Stephen Chiu, FX and Rates, APAC
Mahesh Bhimalingam, Credit Strategy, EMEA Ira Jersey, Rates,US
Philip Brendel, Distressed Debt, Americas Davison Santana, FX and Rates, LatAm
Rod Chadehumbe, ABS, Americas Sergei Voloboev, FX, Emerging Markets, Global
Sam Geier, Credit Strategy, Americas Huw Worthington, Rates, EMEA
Noel Hebert, Credit Strategy, Americas
Eric Kazatsky, Municipals, Americas
Mike McGlone, Commodity Strategy, Global
Tanvir Sandhu, Derivatives, Global
Damian Sassower, Emerging Markets, Global
Timothy Tan, Credit Strategy, APAC

ESG Research
Adeline Diab, Director of ESG Strategy Research Eric Kane, Director of ESG Company Research
Strategy Company and Industry
Manish Bangard, Americas Shaheen Contractor, Industry, Global
Adeline Diab, Global Rob Du Boff, Governance, Global
Ortis Fan, APAC Gail Glazerman, Integration, Americas
Yasutake Homma, Japan Eric Kane, Global
Rahul Mahtani, Quantitative Analysis, EMEA Grace Osborne, Integration, EMEA
Christopher Ratti, Fixed Income, Global Andrew John Stevenson, Climate, Global
Conrad Tan, Integration, APAC

Market Structure Research

Larry Tabb, Director of Market Structure Research
Jackson Gutenplan, Equities, Americas Nicholas Phillips, Equities, EMEA
Brian Meehan, Fixed Income, Americas Larry Tabb, Equities and Fixed Income, Global

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 Dec. 4, 2024

Credit Research
Joel Levington, Director of Credit Research
Americas Asia
Himanshu Bakshi, Consumer Finance, Banking, Global Andrew Chan, Real Estate, Infrastructure, China
Mike Campellone, Specialty Apparel, Consumer Hardlines, Global Sharon Chen, Telecom Carriers, Infrastructure, India
Cecilia Chan, Gaming Lodging & Restaurants, Internet Media, China Pri De Silva, Banking, Aerospace & Defense, APAC
Jean-Yves Coupin, Health Care, Corporate Bonds, Americas Daniel Fan, Real Estate, China
Spencer Cutter, Oil & Gas, Global Rena Kwok, Banking, APAC
Stephen Flynn, Entertainment, Cable & Satellite, Americas Mary Ellen Olson, Metals & Mining, Oil & Gas, APAC
Matthew Geudtner, Aerospace, Global, Machinery, Americas EMEA
David Havens, Consumer Finance, Investment Mgmt, Americas Tolu Alamutu, Real Estate, Banking, EMEA
Mike Holland, Hospitals, Specialty-Generic Pharma, Americas Ruben Benavides, Banking, Europe
Julie Hung, Packaged Food, Beverages, Americas Aidan Cheslin, Telecom Carriers, EMEA
Arnold Kakuda, Investment Banking, Americas Jeroen Julius, Banking, EMEA
Joel Levington, Automobiles, Global, Industrials, Americas Stephane Kovatchev, Industrials, Construction, EMEA, Americas
Jody Lurie, Gaming Lodging & Restaurants, Americas Paul Vickars, Electric Utilities, EMEA, Oil & Gas, Global
Robert Schiffman, Hardware & Storage, Internet Media, Global

Industry Research
Consumer Industrials
Consumer Products & Services Steve Man, Director of Industrial Research
Brian Egger, Gaming & Lodging, Americas Automotive
Angela HanLee, Gaming & Hospitality, APAC Joanna Chen, Automobiles, APAC
Drew Reading, Homebuilders, Americas Gillian Davis, Automobiles, EMEA
Deborah Aitken, Luxury, Personal Care Products, Global Michael Dean, Automobiles, EMEA
Michael Halen, Restaurants, Americas Steve Man, Automobiles, Americas
Conroy Gaynor, Travel & Leisure, EMEA Tatsuo Yoshida, Automobiles, Japan
Retail & Wholesale Industrial & Industrial Services
Lindsay Dutch, Consumer Hardlines, Retail REIT, Americas George Ferguson, Aerospace & Defense, Global
Tatiana Lisitsina, Consumer Hardlines, Online Apparel, EMEA Will Lee, Aerospace & Defense, Americas
Poonam Goyal, E-Commerce, Specialty Apparel Stores, Americas Wayne Sanders, Defense, Americas
Catherine Lim, Consumer Goods, E-Commerce, APAC Stuart Gordon, Business Services, Europe
Charles Allen, Retail Staples & Wholesale, Specialty Apparel, EMEA Christopher Ciolino, Machinery, Industrials, Americas
Mary Ross Gilbert, Specialty Apparel Stores, Americas Christina Feehery, Industrials, Americas
Abigail Gilmartin, Athleisure & Footwear, Americas Takeshi Kitaura, Industrials, Japan
Consumer Staples Mustafa Okur, Electrical Equipment, Industrials, Americas
Jennifer Bartashus, Packaged Food and Retail Staples, Americas Bhawin Thakker, Industrials, EMEA
Duncan Fox, Beverages, Packaged Food, EMEA Karen Ubelhart, Industrials, Machinery, Americas
Kenneth Shea, Beverages, Tobacco & Cannabis, Americas Omid Vaziri, Industrials, EMEA
Diana Gomes, Consumer Health, Household Products, Global Denise Wong, Infrastructure, APAC
Lisa Lee, Consumer Goods, Health Care, APAC Transportation
Ada Li, Consumer Goods, Online Health Care, APAC Tim Bacchus, Airlines, APAC
Diana Rosero-Pena, Packaged Food, Retail Staples, Americas Francois Duflot, Airlines, Americas
Lea El-Hage, Retail Staples, Australia George Ferguson, Airlines, Global
Energy Conroy Gaynor, Airlines, EMEA
Will Hares, Energy Sector Head Lee Klaskow, Freight Transportation & Logistics, Global
Brett Gibbs, Biofuels, EMEA Kenneth Loh, Marine Shipping, Logistics Services, APAC
Talon Custer, Oil & Gas, Americas Materials
Henik Fung, Oil & Gas, Gas Utilities, APAC Jason Miner, Agriculture Sector Head
Will Hares, Oil & Gas, EMEA Grant Sporre, Metals and Mining Sector Head
Scott J. Levine, Oil & Gas, Industrials, Americas Chemicals
Vincent G. Piazza, Oil & Gas, Americas Daniel Cole, Agricultural Chemicals, Americas
Salih Yilmaz, Oil & Gas, EMEA Alexis Maxwell, Agricultural Chemicals, Canada
Rob Barnett, Solar Energy Equipment, Americas, EMEA Alvin Tai, Agriculture, Malaysia, EMEA
Utilities Jason Miner, Agriculture and Chemicals, Americas
Patricio Alvarez, Electric Utilities, Gas Utilities, EMEA Sean Gilmartin, Specialty Chemicals, Americas
Nikki Hsu, Electric Utilities, Americas Vivien Zheng, Speciality Chemicals, APAC
Kelvin Ng, Utilities, Coal, APAC Metals & Mining
Gabriela Privetera, Electric Utilities, Americas Richard Bourke, Basic Materials, Americas
Financials Mohsen Crofts, Metals & Mining, Real Estate, Australia
Financial Services Michelle Leung, Metals & Mining, China, Japan
Ben Elliott, Consumer Finance, Americas Emmanuel Munjeri, Metals & Mining, South Africa
Edmond Christou, Financials, Middle East Alon Olsha, Metals & Mining, EMEA
Diksha Gera, Global Payments and Fintech, Americas Grant Sporre, Metals & Mining, EMEA
Salome Skhirtladze, Financials, Middle East

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 Dec. 4, 2024

Financial Services (Cont’d) Construction Materials

Sarah Jane Mahmud, Banking, Market Structure, ASEAN and India Sonia Baldeira, Construction, Building Materials, EMEA
Alison Williams, Investment Banking, Global Kevin Kouam, Building Materials, Global
Sharnie Wong, Investment Banking, Exchanges, APAC Technology
Paul Gulberg, Investment Management, Exchanges, Banks Americas Mandeep Singh, Director of Technology Research
Ethan Kaye, Investment Management, Americas Hardware
Neil Sipes, Investment Management, Investment Banking, Americas Woo Jin Ho, Hardware & Networking, Americas
Hideyasu Ban, Financial Services, Japan Ken Hui, Semiconductors, Europe
Matt Ingram, Financial Services, Australia and Korea Charles Shum, Semiconductors, APAC
Banking Jake Silverman, Logic ICs, Americas
Francis Chan, Banking & Fintech, China & Hong Kong Kunjan Sobhani, Logic ICs, Americas
Herman Chan, Banking, Americas Steven Tseng, EMS/ODM, Consumer Electronics, APAC
Tomasz Noetzel, Banking, EMEA Masahiro Wakasugi, Semiconductors, EMS/ODM, Global
Philip Richards, Banking, EMEA Software
Lento Tang, Banking, EMEA Tamlin Bason, IT Services, Americas, EMEA
Maryana Vartsaba, Banking, EMEA Robert Lea, Internet Media, Application Software, China
Insurance Nathan Naidu, Entertainment Content, Internet Media, Japan
Steven Lam, Insurance, APAC Niraj Patel, Application Software, Americas
Jeffrey Flynn, Life Insurance, Americas Sunil Rajgopal, Application Infrastructure Software, Americas
Kevin Ryan, Life Insurance, P&C Insurance, EMEA Anurag Rana, Application Software, IT Services, Americas
Charles Graham, P&C Insurance, Life Insurance, EMEA Mandeep Singh, Software, Internet, Hardware/Semis, Americas
Matthew Palazola, P&C Insurance, Americas Communications
Real Estate Media
Jack Baxter, Real Estate, Australia Matthew Bloxham, Media, Advertising, Telecom, EMEA
Ken Foong, Real Estate, Singapore Geetha Ranganathan, Entertainment, Cable, Advertising, Americas
Iwona Hovenko, Real Estate, Business Services, EMEA Tom Ward, Media, Advertising, Telecom Carriers, EMEA
Kristy Hung, Real Estate, China Telecommunications
Jeffrey Langbaum, Residential REIT, Office REIT, Americas John Butler, Telecom & Towers, Infrastructure Software, Americas
Sue Munden, Real Estate, EMEA John Davies, Telecom Carriers and Media, EMEA
Patrick Wong, Real Estate, APAC Erhan Gurses, Telecom Carriers, EMEA
Health Care Marvin Lo, Telecom Carriers, APAC
Aude Gerspacher, Director of Health Care Research Chris Muckensturm, Telecom Carriers, ASEAN
Biotech & Pharma Litigation and Policy
Sam Fazeli, Biotech, Global Nathan Dean, Financials Policy, Americas
Grace Guo, Biotech, Pharma, Americas Holly Froum, Consumer, Industrials Litigation and Policy, Americas
Jean Rivera Irizarry, Biotech, Pharma, Americas Josephine Garban, Health Care Patent Litigation, Americas
Jamie Maarten, Biotech, China Jennifer Rie, Antitrust Litigation and Policy, Americas
Max Nisen, Biotech, Americas Matthew Schettenhelm, TMT Litigation and Policy, Americas
Michael Shah, Biotech, Specialty-Generic Pharma, EMEA Elliott Stein, Financials Litigation, Americas
Leslie Yang, Biotech, China Justin Teresi, Antitrust Litigation and Policy, Americas
John Murphy, Large Pharma, Biotech, Americas, EMEA Duane Wright, Health Care Policy, Americas
Aude Gerspacher, Pharma, Biotech, Americas
Justin Kim, Biotech, Pharma, Americas
Ann-Hunter Van Kirk, Specialty-Generic Pharma, Americas
Glen Losev, Hospitals, Managed Care, Americas
Jonathan Palmer, Medical Devices, Supply Chain, Americas
Matt Henriksson, Medical Equipment & Devices, Americas

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 Dec. 4, 2024

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