Richard Perry ran a hedge fund for almost three decades before closing it in 2016. Now he has decided it’s time for a comeback.
Richard Cooper’s phone is something of an early alarm bell for the global economy. Lately, it’s been ringing a lot.
A heap of distressed debt is expanding in the US corporate bond market and investors worry that a burst of defaults will follow.
Multi-billion dollar funds are now launched in such frequency that they might almost be considered mundane. In fact, more than 50 ‘B Funds’ were launched between January and June of 2020. Typically featuring a minimum check size of $100M-500M, 3 to 5 year terms and no shortage of well educated, Oxford suit wearing partners ready to play “let’s make a deal."
The moves threaten to upend huge swaths of the real estate market and the half-trillion dollar market for commercial mortgage-backed securities.
Over the last several years, we have recognized what has been going on with negative or near negative interest rates in Japan, and is now bleeding into parts of Europe. We never imagined that those troubles from afar would be any more than banter amongst economists and financial doomsdayers. The reality of those environments have now made it to the shores of the good ol’ USA.
Private credit relies less on broad market trends and more on the strength of each specific investment. For individuals facing retirement, institutions looking to satisfy long-term pension liabilities or even private investors looking for alternative investments, it offers high current income, low correlations with public markets and lower default risks than yield spreads would imply.
