Fortress Co-CEO Drew McKnight recently joined Debtwire's new Credit Exchange podcast to share his insights into opportunities in private credit. Quick takes from Drew’s views:
- Sponsor finance: The largest sector within generic private credit is direct lending and direct lending sponsor finance – a space where Fortress has been cautious over the past year as the lack of M&A has created a very competitive market dynamic. With an expected uptick in M&A ahead, more balanced supply-demand dynamics will create more opportunities to deploy private credit to leveraged buyouts.
- Forward flows: The asset class where Fortress has been most active on a trailing twelve-month basis, and where Fortress’s pipeline is strongest, is forward flows and asset-based finance. Tremendous growth has been driven by a pull-back in financing from traditional bank lenders, and Fortress sees a lot of opportunity ahead.
- Outlook for M&A: Bridging the bid-ask gap on valuations and finding liquidity in the context of legacy private equity positions will be important for unleashing the M&A environment.
Listen to the full discussion on the Credit Exchange website, on Spotify or Apple Podcasts.
