Special Feature
Weighing up opportunity How are direct lenders responding to the pandemic? Tom Cox Partner FRP Advisory
Ian Corfield Partner FRP Advisory
T
his year has already been a significant year for the direct lending market, with historic portfolio selection by all funds tested in full. The ongoing crisis has enveloped global economies, bringing disruption and uncertainty, and the behaviour of the private credit market will continue to be stress-tested in the face of significant borrower performance volatility – even if it is not of their own making. Despite the private credit market having operated for over a decade, many borrowers and sponsors have continually questioned how direct lenders would behave in a recession. While the crisis has already seen major banks facing extraordinary levels of funding requests linked to wider government support, it could now represent a major opportunity for fund capital deployment as a lifeblood to many companies – particularly with initiatives like the Coronavirus Business Interruption Loan Scheme drawing to a close.
