Opportunistic Credit

Weak European growth and rising defaults are tipping companies into the sweet spot for opportunistic credit.

A lack of genuine distressed debt opportunities is leading some GPs to consider whether this strategy is still a valid play.

Tough times may lie ahead for the UK – but will expectations for distressed activity be realised this time?

Several big hitters are now in the market with ambitious opportunistic credit strategies, hoping to capitalise as LPs turn away from conventional distressed plays. So, what has prompted this change of tack?

The European NPL market opportunity set is growing for those with experience and established bank relationships, says Paul Burdell, co-founder and CEO of LCM Partners.

Whether it’s corporate credit, asset-based loans or real estate debt, opportunistic investing requires flexibility to identify the best rewards, say Sculptor Capital Management’s Brett Klein and Udai Bishnoi.

Continuing bank retrenchment and an underserved lower mid-market have tilted the playing field in favour of a growth-orientated approach to opportunistic credit, says Ian Jackson, head of Permira Strategic Opportunities.

Opportunistic credit involves bespoke financing across a broad set of market environments, says Bryan High, head of global private finance and capital solutions at Barings.

Opportunistic credit funds are gearing up for a busy year as increased interest rates start to bite, says Alter Domus group sector head of debt capital markets Greg Myers.

There are opportune markets available for experienced local lenders, say Arrow Global’s Toni McDermott and Richard Roberts.