Private credit managers shift beyond direct lending
Private credit managers are increasingly looking beyond traditional direct lending as fundraising slows, investor withdrawals remain elevated and new loan origination declines across parts of the market, according to a report by Bloomberg.
Private credit managers are increasingly targeting the £1tn-plus UK defined-benefit pension market as a potential source of capital, according to a Wall Street Journal report. A new partnership between Standard Life, CVC Capital Partners, Goldman Sachs and PGIM commits $2bn to private-market assets to support defined-benefit pension schemes, which still hold over £1tn in liabilities.
These schemes, many of which have been closed to new members, are attracting insurers looking to assume responsibility for pension assets through bulk annuity transactions. This shift has attracted major private capital firms like Apollo, Brookfield and Blackstone, who are expanding their involvement in the UK pension risk-transfer market.
Despite the opportunities, regulatory concerns over competition and profit margins have led the Bank of England to warn insurers against taking on additional investment risk without proper compensation. Offshore structures are also a concern, with the Bank of England planning to increase capital requirements. Private credit investments are gaining indirect exposure to the UK pension market through entities like Blackstone and Brookfield, which are supplying private-credit assets to pension funds.
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- Private credit managers eye UK DB pension funds privateequitywire.co.uk
