There are a lot of terms ending in ‘-ion’ abuzz in the private credit market at the moment. Leading the charge is the supposed convergence of traditional players in the syndicated loan market (the underwriting banks) and private credit funds, the latter of whom have been edging in on the former’s territory for quite some time. 

This ‘syndification’ of private credit (can’t take credit for this, it rolled off the tongue of a wordsmith source) first took the form of hung deals in 2022, where private credit funds would take down chunks of debt held by banks unable to sell it via syndication, then dual-track processes, where private credit and the syndicated players competed in parallel for deals - and private credit often won. 

Why? “Monetary tightening and higher financing costs have strained business activity and capital structures,” said David Allen, CIO at AlbaCore. “However, as banks simultaneously become more wary of underwriting risk it creates an attractive environment for credit selection, particularly for funds that can provide capital dynamically and at scale.”