Private credit ‘stepping in to support banks’, says Arrow Global CEO
Private credit is playing an important role in supporting banks, according to Arrow Global chief executive officer Zach Lewy.
In a commentary piece for Investment & Pensions Europe, Lewy claimed that private credit “has undergone a transformation in recent years”, adding that “the opportunities ahead are clearer than ever”.
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Businesses, loans and investments from before 2022 have been challenged by the coronavirus pandemic, inflation and interest rate changes, he noted, which is now making refinancing “particularly difficult”.
“Banks that were once comfortable extending credit are now reconsidering, and in many cases, the answer is no,” he said. “This is leading to a surge in restructurings, with many borrowers experiencing payment distress at levels comparable to the peak of the pandemic”.
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Private credit is playing a crucial role in response, according to Lewy. “We are stepping in to support banks, either by managing restructurings or providing additional capital to bridge the gap,” he said.
“At the same time, equity investment is regaining momentum. With global elections behind us, many investors are moving forward with greater clarity, eager to transact before the next wave of macroeconomic uncertainty arrives.”
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