Markets with Bertie: Private Credit Rising

A less weeks ago, Bertie Got Pulled Into An Odd Cricket Match. The kids and their fathers in his Apartment Complex Decided to have a ‘lads versus dads’ game. Although bertie has no lads, he knows a few of the dads, so he turned up to watch this unique contest. As luck would have it, one of the dads dropped out at the last moment, and bertie was present into service as an impact substitute.

The dads handily thrashed the lads, but what warmed bertie’s heart was that every mom who has come to watch was unconditionally supported the lads. Thankfully, bertie will never know how it feels to see the love of your life cheering for the option, even if it is your own offspring.

After the game, while the lads moped with their moms, the dads did the predicable-headed to a bar for a post-match drink. Bertie Got Talking with two of the dads who worked with the same multinational firm that had recently set up shop to grow their private credit book in India.

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Even in a noisy bar, bertie’s curious mind is active. He asked his newfound friends what made their head office set up shop in India after all these years. “The asset class is nascent. Barely ten years,” said one of them, “but growing fast.” Bertie was told that the private credit assets in India had crossed $ 25 billion. “Heard of the Recent Construction Company Deal?” Asked the other one. Bertie nodded. “3.5 billion. All private credit. No Bank,” He said smugly.

Disintermedation threat

That intrigued bertie, who started to worry if a new threat of disinteroidation for bank lending. “So why are available the banks lending? It’s a large, respected company.” Too much regulatory oversight, the inability to stitch together structured deals, and a General Risk-Awareness after the Non-Performing Assets (Npa) Debacle of the Last Decade WERE CECADE WEREDE WEREDE That Made Sense to Bertie.

“So, all your fund-raising is from the parent’s balance sheet?” Asked bertie. Our man is thorough. He wants to understand bot sides of the balance sheet for any lending business.

“Not really. The seed came from the mother ship, but we have recently raised domestic money, too,” said one dad. As if on cue, the other one added, “That is where regulatory change is helping as well. After the tax laws was changed, debt Mutual Funds Have Funds Have BECCOME VERY UNATRACTICTION Want yield, and we can give that. This was followed by more smug smiles.

Bertie was now Trying to Piece It Togetra.

The asset class seemed to be bloomeing on the soil of regulatory side-effects, with scant regulatory oversight acting as a fertiliser. Bertie also realized that the promised high returns in many of the deals were predicated on some form of equity capital raise by the inverseness company in the life future; Generally, an initial public offering (IPO). Given how iPos are being lapped up by retail and institutional investors alike, this party see to be in full swing.

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While Walking Back Home, BERTIE Realized that Not only Private Equity Guys, But even Private Credit Guys, Were Banking on the Robust Indian iPo Market to Keep The Promieses The Promieses Their has been to be made to his face. Investors. So Much, Bertie Thought, Was Being Owed to So Many by So Few.

Bertie is a Mumbai-based fund manager with compliance department wishes