“[Even] before these two rate cuts, people felt pretty confident you were at the peak,” Oliver Thym, partner and head of credit at Thoma Bravo, said. “Before that, private equity clients of ours just didn’t know what to put in the models.”

Thoma Bravo is specifically focused on tech, so because most companies are not engaged in overseas shipping it means the sector overall more immune than other sectors, certainly benefitting tech-focused investors such as Thoma Bravo. For tariffs and other factors that have dampened sentiment in other industries since Trump won the electoral college quite comfortably. (For more on what a Trump presidency could mean for direct lending, you can read 9fin’s coverage here.)

The firm has been able to complete deals, such as its sale of Instructure, an education software firm, to KKR for $4.8bn in July and the sale of a minority stake in portfolio company Qlik to the Abu Dhabi Investment Authority, which gives the company a $10bn valuation, according to reports.

The broadly syndicated market has roared back and may continue to encroach on market share under Trump. However, the amount of new entrants across both the direct lenders and banks means the huge appetite for dealmaking could drive an increase in transactions in 2025.

Mock said that Thoma’s private equity business has a rolodex of around 30 direct lenders it will regularly call. It only needs between five and 10 in any given deal.

The amount of lenders available means if some pass because terms are too aggressive, or leverage is too high, or the documents are too weak, there are plenty more lenders to underwrite the deal. LPs are even building out private debt practices to provide co-investments in deals, Mock said, and the amount of capital is plentiful from other parts of the market, such as hedge funds.

All of this means that the refrain of M&A coming back might actually come true.

“The beauty is that the private credit market is so deep now,” Mock said. “We can call on many [sic] to get the best outcomes for our portfolio.”

New year, same me?

As hundreds of dealmakers flitted through the floors of the Mariott in midtown NYC during the North America SuperReturn conference this week, the one thing on everyone’s lips was also next year’s potential onslaught of M&A activity.

Granted, market participants are often predicting that the next wave is right around the corner, but this time, they’re pretty sure of it, per the dozens of conversations we had on the conference floor.

Many said that the some of the challenges that PE firms have faced when it comes to the pace of selling companies, returning capital to investors, and catching up on DPI is finally going to get the wheels turning again.

“The pace at which I’m signing NDAs [should mean] things better start up again next year. But we’ll see if these are more false starts like we’ve seen [in] the last couple years,” one MD at at a private credit fund told 9fin.

Still, that return may be more a squeak than an all out roar, one head of a credit manager noted: “My expectation is that in the coming period we’re gonna see a bit of an acceleration — I’m not predicting a sea change on January 1, I think it’s going to take until mid-25 before we see a really meaningful acceleration in middle market M&A,” he said.

And, others also noted that the upcoming presidential election may also increase the amount of deal activity in the coming years, though how much of that will be a boon for private credit lenders, as elevated bank competition is also expected to continue.

Blackstone launching five deals this week alone tells you all you need to know about bank appetite in the Trump era!

This week on the 9fin platform

Save hours of manual work with BDC holdings data at your fingertips (free to read)

Neptune Retail Solutions premarkets private-to-public loan refi (free to read)

MidCap Financial Investment Corp. — Q3 24 BDC earnings review

GoHealth nets $510m rescue financing from Blue Torch, PSP, Redwood

LP Wrap — Private credit really is the cat’s pyjamas

ThriftBooks looks to next chapter of ownership with potential sale

Blackstone Secured Lending — Q3 24 BDC earnings review

Blackstone backs Brigade in private credit and CLOs

What’s in market

Encylcopedia Britannica — Bank of America has been brought on to advise on the sale of the $40m-plus EBITDA company.

NSI Industries — the maker of electrical and HVAC products is close to a sale to Sentinel Capital Partners, which is set to be funded with a $1.2bn private credit financing package

Accupac — owner Palladium Equity Partners has tapped Piper Sandler to explore a $200m refinancing for the cosmetic contract development company

Anaqua — Bids are in for the intellectual property software service provider, with five firms offering north of $2bn. An $800m debt package is being talked about

Midwest Transit Equipment — the BrightWater-backed distributor of new and used buses is exploring a sale with the help of investment bank Harris Williams

Lycra — The spandex maker is approaching opportunistic credit funds for a $350m debt deal, partly refinancing the company’s existing facilities

Amerit Fleet Solutions — the Brightstar-backed maintenance provider for delivery vehicles is exploring a potential sale with the help of advisors Moelis & Company

From around the web

Private-credit boom has echoes of subprime, warns senior central banker (WSJ)

Wall Street bonuses are back (Axios)

Stonepeak agrees to buy private credit investment firm Boundary Street (BBG)

Private credit lifts Brazil lenders’ investment banking fortunes (BBG)

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