|BlackRock’s private credit plans also add further validity to an industry on the rise.
One executive in the space told Rebecca that BlackRock’s entrance is a “stamp of approval” for the market.
And while everyone seems to want in on the action — private credit was the talk of the Greenwich Economic Forum last month — it’s unclear how that’ll ultimately impact the industry.
Lending is a complicated enough business on its own. Adding more competitors in a high-rate environment, without the shackles that regulate traditional banks, feels like a recipe for disaster.
Maybe I’m paranoid, but Wall Street’s history of investing in floating-rate debt structures shrouded in mystery isn’t pristine.
BlackRock’s cohead of US private capital said during a recent earnings call the firm was passing on more lending opportunities, citing deal terms without adequate lender protections.
But as more inexperienced players dive into the space, the probability of someone willing to lend to a borrower in need, regardless of the red flags, will rise.