Market Reviews
ASIC turns up the heat on private markets
ASIC is increasing scrutiny of Australia’s private markets, citing risks like opacity, illiquidity, and conflicts in private debt investments. The regulator is also examining superannuation funds’ growing exposure to private assets, with some allocating up to 38% of their portfolios to this sector.
What we're watching
What We’re Watching: Why everyone should care about the California wildfires
The devastating California wildfires of January 2025 caused unprecedented economic and housing market impacts, with insured losses reaching up to US$75 billion and broader damages estimated at US$275 billion. As extreme weather events drive up insurance costs and reduce coverage availability, property values face mounting pressure, making risk assessment a crucial consideration for investors and lenders alike.
Market Reviews
European & Australian ABS: Rounding up 2024 and looking ahead to 2025
2024 was yet another positive year for the European & Australian Asset Backed Securities (ABS) markets with record issuance and continued robust performance and resilience. We review the year that was here, along with our key areas of focus for 2025.
Market Reviews
Uncertainty Weighs on UK Auto Lenders Due to Recent Court Rulings
UK auto lenders are currently grappling with significant issues due to recent rulings in court cases involving customers complaints regarding the lack of adequate information about commission fees when taking out a financing arrangement.
What we're watching
What We’re Watching: Quarterly Report – December 2024
In the December quarterly report, we highlight the decline in U.S. private market credit spreads during 2024, reflecting the resilience of credit markets to rising interest rates despite persistently high inflation. However, the report also notes elevated U.S. speculative-grade default rates and record corporate insolvencies in Australia, underscoring the ongoing challenges posed by higher borrowing costs.
Knowledge
Introduction to Collateralised Loan Obligations (CLOs)
A CLO is a type of structured finance product which is backed by a diversified pool of corporate loans.
What we're watching
What We’re Watching: Review of 2024
Tis the season of outlooks and reviews. As we did last year, this month we’ll share some books, podcast and other things that have influenced our team’s thinking during 2024.
Knowledge
Introduction to Asset-Backed Securities
Asset-backed securities (ABS) are a type of structured credit instrument where bonds are backed by underlying pools of assets such as mortgages, loans or other corporate or consumer debt. A portfolio of comparable assets are grouped together and held by a Special Purpose Vehicle (SPV). These are then securitised with the bonds backed by the asset portfolio -sold to investors in the market.
What we're watching
What We’re Watching: Trump trade 2.0 – Who is going to buy all this stuff?
We examine what the new Trump presidency means for the US sovereign, discussing which parts of the private credit market are most exposed to the prospects of higher deficits.
What we're watching
What We’re Watching: September Quarterly Report
The September Quarterly Report highlights a divergence in credit market performance, with high yield appearing expensive relative to investment grade, while private markets offer more attractive opportunities amid increased scrutiny of default rates.
What we're watching
What We’re Watching: Lessons from the noughties: Fooling some of the people all of the time.
With so much focus on the topic of governance in private debt, this month we review David Einhorn’s classic story of the demise of a pre-GFC private lender.
What we're watching
What We’re Watching: The Olympics of Banking: and the gold goes to…
This month we compare Q2 banking results in the United States with the national champion CBA.