- "This capital largely did not even exist" in the days ahead of the financial crisis," says Deutsche's head of credit strategy Oleg Melentyev. Private-equity funds have raised at least $300B to invest in credit, and are likely buyers in any selloff, he says, taking over a job that used to be performed by the banks.
- Shops like Carlyle Group, Blackstone, and KKR are among those who have diversified beyond their traditional buyout operations in part by boosting their debt investments. Recently public Ares Management (NYSE:ARES) has the most amount of capital to invest in its 17-year history, says the head of its tradable credit group.
- "Our estimate of alternative capital in credit exceeds the total drop in dealer inventories [i.e. banks] since 2007," says the Deutsche team.
- ETFs: HYG, JNK, LQD, HYLD, CORP, SJB, CRED, ANGL, HYLS, UJB, XOVR, QLTA, QLTC, IGS, COBO, QLTB, CBND, IGU
Private equity to keep a bid under corporate credit
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Symbol | Last Price | % Chg |
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ARES | - | - |
Ares Management Corporation |