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November 22, 2021 | GSAM Featured Insights

Private Credit Observations: Tailwinds Abound

Following the global market volatility of 2020, activity in both the public and private markets has been running at an elevated pace in 2021. With economies reopening, global public equity and credit indices touching record levels, and transaction volumes soaring in 2021, several positive secular tailwinds have emerged that we view as very attractive long-term drivers of the private credit markets.

A key factor is the ongoing maturation of the private equity industry, which is increasingly looking to private credit as a means of both financing new deals and supporting existing portfolio companies. To meet the evolving needs of the PE industry, private credit investors are seeing more opportunities deeper in the capital structure (subordinated/second-lien debt), embracing larger transactions—including “jumbo unitranche” facilities—and expanding outside developed markets into geographies with more growth potential.

 

About the Authors

Thomas Hilger

Thomas Hilger

Managing Director in Private Credit, Goldman Sachs Asset Management
Brady Schuck

Brady Schuck

Managing Director in Private Credit, Goldman Sachs Asset Management