News Digest: Private equity steps up lending amidst pull back from US banks
May 26, 2023
The turmoil in the US banking industry has resulted in banks pulling back from making major investments and now private equity funds and insurers are stepping to lend more, says a Reuters report.
It says non-bank lenders with assets, who have constantly been funding credit assets, are now facing a situation where they are getting into consumer finance and mortgages or even funding construction of buildings and other assets. The report noted that several PE firms including the likes of Ares Management, Brookfield Asset Management and KKR are lending in areas dominated by banks.
Investors providing private credit comprise 12 per cent of the $6.3 trillion US commercial credit market, according to Fitch Ratings. That compares with regional banks, which account for $4.5 trillion in loans, or 40 percent of the US total.