What we’re watching

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.

In this article, Sid Kumar, Head of Acquisition Finance at Challenger Investment Management discusses how lenders are getting some of the balance back when it comes to private credit investing in current macroeconomic conditions in Australia. Kumar highlights tightening lending conditions, stricter loan requirements, and the importance of selecting experienced managers to navigate through uncertainty.

This month we compare Australian commercial real estate loans with the United States, assessing which of the two markets are most acutely impacted by the higher interest rate environment as well as looking to where we may see opportunities in the quarters to come. 

We provide our quarterly around-the-grounds perspective on non-financial credit, financial credit, ABS & whole loans and real estate loans, highlighting patience is key.

We wade into the debate on valuations of private assets stressing the importance of understanding the background and rationale for different approaches and why transparency is critical. We also discuss recent events around Credit Suisse and US regional banks.

We discuss the impact that house price formations during COVID had on reducing vacancy rates, even in the face of net outward migration.