Chart of the week

Showing 1–6 insights out of 7 results
Chart of the week

U.S. middle market shows notably strong top-line growth

Private middle market firms continue to power the U.S. economy, driving higher revenue growth than that of small and large cap firms.

Column chart showing trailing 12-month revenue growth of constituents of the Russell 2000 Index (1.6%), the S&P 500 (6.2%) and the private U.S. middle market (12.9%). The strong revenue outperformance of private middle market firms speaks to the fundamental health of these companies relative to public small- and large-cap firms.
Chart of the week

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.
Chart of the week

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.
Chart of the week

Shrinking public markets mean growth in private markets

Take-private volume has outpaced IPO volume by 3.5x since 2022. This represents an accelerating shift in opportunity toward private markets.

Column chart showing the IPO- and take-private volume by year. Since 2022, take-private volume has outpaced IPO volume by more than 3.5x, highlighting a trend in which the number of publicly traded firms has halved, from about 8,000 to 4,000 since the mid-1990s, while the opportunity set within private markets has seen corresponding growth.
Chart of the week

Private credit loss rates don’t support draconian headlines

Direct lending loss rates compare favorably to much of the leveraged finance market, as this week’s chart shows.

Column chart that shows direct lending’s historical loss rate since 2005 compares favorably to many other parts of the leveraged finance markets. The direct lending loss rate of -1.03% is roughly in line with leveraged loans (0.92%), but below that of high yield bonds (-1.49%) and commercial and industrial bank loans (-2.30%).
Chart of the week

Private credit valuations proven conservative over time

Private credit investors’ realized losses have been about half that of unrealized markdowns during the past three periods of market stress.

Close up thumbnail of a column chart
Showing 1–6 insights out of 7 results

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