Private Credit Deep Dives – Going Exclusive (Europe)

In recent months, market participants have become increasingly optimistic about the probability of a "soft landing" in the US economy, whereby tight monetary policy is shown to have tamed inflation whilst avoiding triggering a recession in the broader economy. The market is, despite inflation proving slightly stickier than expected, still (for now at least) forecasting multiple Fed rate cuts during the course of 2024 as the rate of price increases steadily slows. This has encouraged a bullish outlook on the part of investors in risk assets, which has led to a rally in equity markets and rapidly tightening spreads in the credit markets, not just in the US but on a global basis. As investor demand has returned, the banks have once again become willing to underwrite new transactions, and the syndicated markets for leveraged credit (which had almost entirely seized up in mid-2022 and remained largely shut in the intervening period) have made a relatively strong comeback