Insights

In this month’s “What We’re Watching”, we provide our quarterly around-the-grounds perspective on public and private credit markets highlighting how the risk on rally that began in Q3 2023 may have run its course.

The team takes a trip down memory lane and discusses how staying open minded in the aftermath of the Global Financial Crisis allowed them to access highly attractive investment opportunities which other investors refused to even consider. The team draws parallels with the pricing of Collateralised Loan Obligations today arguing that they still offer additional returns as a result of a lingering negative perception connected to the performance of other structured finance securities during the GFC.

In this thought piece we discuss insecurity about cyber security, a risk factor that is increasingly relevant but remains underappreciated. We explore how to consider cyber risk in due diligence of individual investments, in portfolio construction, plus how to assess an investment manager’s preparedness to manage cyber risk at the fund level.

We provide our quarterly around-the-grounds perspective on public and private credit markets discussing the year that was plus the rates fuelled rally in risk markets which took place against a backdrop of deteriorating fundamentals.

CIM end 2023 with the team reviewing some of their favourite books, podcasts, Twitter follows and financial markets research. We hope you will find some interesting recommendations to enjoy over the holiday break.

This month we discuss the Federal Reserve’s Senior Loan Officer Opinion Survey on Bank Lending Practices otherwise known as the SLOOS. We highlight how it has historically provided a strong indication of recessions and market drawdowns and highlight where the tightening in bank lending standards is most pronounced.

Our quarterly perspective on public and private credit markets, APRA’s stance on bank capital and the ongoing pressures facing the non-bank lending sector.

We discuss warehouse lending, a sector which is receiving greater interest from global private credit investors despite not being particularly well understood.

We discuss how many companies are still suffering the after effects of the COVID pandemic making them particularly susceptible to the combination of a slowing economy and persistently higher interest rates.

We provide our quarterly around-the-grounds perspective on public and private credit markets covering the sharp rebound in financial credit, signs of stress in corporate credit markets and the worsening outlook in commercial real estate.