Private credit Archives

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Private markets outlook: Refilling the glass

As we approach the end of 2024, sparks of life are emerging in private markets, fueling optimism for improved liquidity and a revitalized investment landscape.

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Nov 20, 2024

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Mapping the markets: Q4 2024

Our Investment Research team compiled their best charts and latest market analysis across macroeconomics, public markets and private market strategies to help our clients map today’s markets.

Private credit yields remain attractive despite Fed rate cuts

Real yields on private credit could remain in their top historical quartile even if the Fed cuts another 75 basis points as markets expect.

Line chart showing private credit real (inflation adjusted) yield and forecasted real yield based on the market-implied forecast of the Fed funds rate through December 2025. Even if the Fed reduces rates by another 75bps by December 2025 as the market currently expects, a private credit real yield of approximately 7.7% would be higher than in 80% of cases throughout the market’s history.

Direct lending volume grows amid increased LBO activity

Private credit has increasingly become the preferred source of financing for PE sponsors, with direct lending volume jumping 60% over last year’s level.

Column chart showing direct lending deal volume by month. A line shows the 3-month moving average which has trended higher this year. Direct lending deal volume of $231 billion through September 2024 represents a nearly 60% jump versus all of 2023, a sign that LBO/M&A activity has picked up in recent months.

Private markets outlook: Refilling the glass

As we approach the end of 2024, sparks of life are emerging in private markets, fueling optimism for improved liquidity and a revitalized investment landscape.