Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
private credit crunch as a potential market contagion
Just my 2c: Surveys have low signal value. Actions speak louder than words and right now someone has shouted fire in the theater so the crowd is rushing towards the exits.
I dunno, maybe the institutional money sees the retail exodus as a contrarian bullish sign.
The WSJ published a story yesterday regarding LENDX redemption requests.
"Stone Ridge Asset Management told clients in the fund last week that recent redemption requests were so high that it would only honor 11% of the amount investors wanted back, according to an investor update viewed by The Wall Street Journal."
"That suggests that investor concerns about private credit are broadening. Unlike other private-credit funds that experienced a flight of investors in recent weeks, Stone Ridge’s fund didn’t hold loans to software makers or other corporate sectors that investors fear will be displaced by advances in artificial intelligence."
Previous & inaugural banking VC Michael Farr was too tough & was pushed out in favor of community banker Michelle Bowman; Farr remains a Fed Governor. Bowman was already for differential rules - tough for big banks, easy for smaller community banks. She also read the room right and favored lesser regulations for big banks. So, all bankers are happy.
Per BBG ... this is sounding more and more like Michael Burry in 'The Big Short', yes?
"Goldman Sachs Group Inc. and JPMorgan Chase & Co. are among investment banks offering hedge fund clients ways to bet against the $1.8 trillion private credit market, people with knowledge of the matter said.
The firms have assembled baskets of listed companies with exposure to the space, the people said, who requested not to be identified discussing bespoke product offerings.
Goldman’s indexes vary from one focused on European financial institutions with private credit exposure to a group of business development companies and another alternatives managers more broadly. JPMorgan’s basket meanwhile includes alternatives managers and BDCs, the people said. Clients can also invest in the indices.
Bank of America Corp. had a basket of European financial firms with exposure to private credit, including Partners Group Holding AG, Deutsche Bank AG and Axa SA. The Financial Times reported Thursday that the bank had since withdrawn a recommendation that clients bet against European companies potentially exposed to private credit shocks."
Comments
Private credit demand climbs as 43pc of investors plan increase
I dunno, maybe the institutional money sees the retail exodus as a contrarian bullish sign.
"Stone Ridge Asset Management told clients in the fund last week that recent redemption requests
were so high that it would only honor 11% of the amount investors wanted back,
according to an investor update viewed by The Wall Street Journal."
"That suggests that investor concerns about private credit are broadening.
Unlike other private-credit funds that experienced a flight of investors in recent weeks,
Stone Ridge’s fund didn’t hold loans to software makers or other corporate sectors
that investors fear will be displaced by advances in artificial intelligence."
https://www.msn.com/en-us/money/companies/private-credit-s-investor-exodus-spreads-to-consumer-loans/ar-AA1YV3RP
Big Banks Score Win Under New Plan to Loosen Capital Rules
(free WSJ link) https://www.wsj.com/finance/regulation/u-s-regulators-propose-more-lenient-capital-rules-for-big-banks-afd3797f?st=GA6Cfe&reflink=desktopwebshare_permalink
Previous & inaugural banking VC Michael Farr was too tough & was pushed out in favor of community banker Michelle Bowman; Farr remains a Fed Governor. Bowman was already for differential rules - tough for big banks, easy for smaller community banks. She also read the room right and favored lesser regulations for big banks. So, all bankers are happy.
"Goldman Sachs Group Inc. and JPMorgan Chase & Co. are among investment banks offering hedge fund clients ways to bet against the $1.8 trillion private credit market, people with knowledge of the matter said.
The firms have assembled baskets of listed companies with exposure to the space, the people said, who requested not to be identified discussing bespoke product offerings.
Goldman’s indexes vary from one focused on European financial institutions with private credit exposure to a group of business development companies and another alternatives managers more broadly. JPMorgan’s basket meanwhile includes alternatives managers and BDCs, the people said. Clients can also invest in the indices.
Bank of America Corp. had a basket of European financial firms with exposure to private credit, including Partners Group Holding AG, Deutsche Bank AG and Axa SA. The Financial Times reported Thursday that the bank had since withdrawn a recommendation that clients bet against European companies potentially exposed to private credit shocks."