As a global provider of proprietary private credit data, analytics and intelligence, Reorg is a key partner for thousands of leveraged finance and restructuring professionals. Darren Maharaj, Director of Leveraged Finance Data, outlines some of the opportunities in the space and and the challenges facing emerging private credit managers…
What opportunities are emerging in the private credit industry in the near future, and how are you positioning your firm to take advantage of them?
The market is very competitive and it’s also fragmented. We’ve seen deals getting larger, there is more liquidity (fundraising), there is more transparency (in historical terms), especially regarding large transactions, funds are looking toward APAC, and subscribers’ needs have become more sophisticated. We provide solutions to their needs (for information) by harvesting more data, allowing investors to seek out comparables more easily, and providing market analysis and tools as well as real-time reporting.
What key pieces of advice do you have for emerging private credit managers seeking to differentiate themselves in a crowded market?
Be more transparent with data providers like Reorg and make yourselves known. Find a niche strategy, as there is a wide variety of borrowers from a wide variety of backgrounds, all looking for bespoke financing. Some market participants want to know not only what the general trends are, but who is doing off-market deals too.
Has the approach to portfolio construction been changing in the private credit industry?
In terms of sectors, private credit investors have been consistently interested in resilient, non-cyclical sectors such as IT and software, healthcare, business services and, to a lesser extent, education. What has changed is that some of the larger funds have been able to deploy much larger tickets. The size of debt they are able to provide to a single borrower has increased substantially to the point that jumbo unitranches over $2bn are no longer a novelty.
How is the interest rate environment affecting sentiment toward private credit?
On the one hand, due to the floating-rate nature of the debt instruments in this space, LPs (investors) are enjoying much higher returns in a perceived “lower-defaulting” asset class. On the other hand, shrinking interest coverage ratios (earnings versus their interest payments, in simple terms) are putting many portfolio companies under stress.
Are you leveraging technology to increase efficiency and reduce costs in your firm’s operations? How have you been putting this into effect?
We’re constantly looking at ways to improve efficiencies including through technology. We are particularly interested in scraping news and data faster for our clients on private credits as it saves them time scrolling through a variety of sites themselves.This is one of many ways that Reorg is leveraging new technologies to promote transparency to opaque markets.
Darren Maharaj, Director of Leveraged Finance Data, Reorg – A specialist in Leveraged Finance, Private Credit and Syndicated Lending, Darren Maharaj leads Reorg’s global Direct Lending content expansion. He oversees data collection & integration, league table generation, analytical content and product build-out, drawing from 20 years of loan market coverage experience. He previously held a similar position as Director of Insights at ION Analytics and comes from Acuris-Debtwire, S&P-LCD and Refinitiv-LPC prior.
