News Digest:

Private credit markets appear to be cozying up to investments in environmental, social, and governance (ESG) products and solutions. According to a news report, of the $156 billion raised by private credit funds in 2023, 16% went into this segment.

This represents a bigger share for ESG in the private credit markets for any year since 2014 with data compiled by Preqin suggesting that growth trend would continue through June 2024 as well. Analysts say this coincides with declining access to loans for green businesses that aren’t innovative enough to appeal to venture capitalists.

Takeaway:

Private credit managers are now building funds to lend to the middle segment that exists between innovation and enterprises that have already achieved scale. They believe that mid-tier companies offer scope for investments that could later be packaged into portfolios for institutional investors. Innovative deals around ESG grew to 11% from 6% in 2023, indicating that Wall Street is pushing the envelope in this sector.

End Notes

Source: https://www.bloomberg.com/news/articles/2024-07-09/private-credit-managers-take-on-wall-street-s-least-loved-label