Man Group looks to balance liquidity more between managers and investors
Man Group’s credit business is in talks about creating structures that try to balance liquidity more between managers and investors.
At the investment firm’s 2024 credit outlook, Eric Burl, head of discretionary, noted that many clients are reducing their exposure to assets such as private equity in favour of fixed income.
While he highlighted that these types of institutional investors “understand illiquidity”, he added that Man Group is talking about “a number of illiquid structures” that try to balance liquidity more between managers and investors.
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The key thing is avoiding a liquidity mismatch, Burl said.
“You can’t pretend something is liquid which isn’t and you can’t sell it as such,” he added.
Mike Scott, global head of high yield and credit opportunities at Man GLG, said at the event that he sees “consistent demand for daily liquidity”, as well as demand for assets such as distressed debt “which tend to be locked up for a longer period of time”.
Scott expects to see growth in demand for distressed debt this year.
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“We’re moving into the part of the cycle where there is a dislocation and borrower delinquencies tend to increase,” he added.
Man Group acquired a controlling stake in US credit firm Varagon last year for $11.7bn (£9.1bn) to expand its presence in the private credit market.
Walter Owens, chief executive of Man Varagon said at the event that it is a great time to invest in the private credit market but lamented the current supply of deals available.
“There’s only a few good deals but there are many lenders,” he said.
“The dynamics of supply and demand means that those opportunities in private credit are gone now.
“We wish we could do more.
“It’s about who wants to sell first.”
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