Man Group plans to expand private credit business
Man Group is looking to expand its private credit offering by making acquisitions or hiring new teams, to capitalise on the fast-growing asset class.
The hedge fund reportedly plans to diversify into different credit strategies in the coming years to meet growing demand from clients and take advantage of the growth of non-bank lending, Eric Burl, Man Group’s head of discretionary, told Bloomberg in an interview.
Read more: Higher default rates loom for corporate direct lending
“We’re open to acquiring businesses, adding teams or individuals,” Burl said. “If we think it’s something where we can add value and it’s relevant to clients, game on.”
Earlier this year, Man Group purchased a controlling stake in Varagon Capital Partners, a New York-based asset manager that lends directly to mid-market companies.
Man Group now offers credit risk sharing, real estate debt and direct lending, and structured credit, as a result of the acquisition.
Read more: Private credit’s returns attract investors and asset managers alike
Burl said he sees private credit as a “structural, multi-year prospect” that is potentially lower risk than equity markets.
The “next five years are going to look a lot different to the last five — it’s a massive opportunity,” he added, according to Bloomberg.
The private credit market is currently valued at $1.7trn (£1.3trn), according to Preqin data, and is predicted to swell to $2.8trn by 2028. Higher interest rates have benefitted the sector, as well as mainstream banks’ retreat from corporate lending.