BlackRock has built industry-leading private debt capabilities over the past 20 years, seeking to deliver attractive results throughout market cycles. Our platform provides a whole portfolio approach to investing across the risk/return spectrum, leveraging our global scale to deliver investment solutions that meet our clients' needs.
Private debt
Global Credit Weekly
In our Global Credit Weekly, Amanda Lynam, Head of Macro Credit Research, addresses the most topical developments and key themes across the liquid and private global corporate credit markets.
Global Credit Outlook
Lingering inflation and tight monetary policy sets the stage for higher cost of capital. Structural protections and nuanced quality are vital for institutional investors.
Why invest in private debt?
There is increasing demand from borrowers for financing from alternatives sources, as banks pull back from lending and syndicated markets see ever larger deal sizes. At the same time, borrowers are increasingly choosing private debt for the benefits it can provide, even when financing is available from traditional sources.
Diversification
Opportunity to diversify sources of portfolio risk and return with low correlation to stocks and bonds
Yield premiums
Offers reliable income with illiquidity premiums and long-term outperformance vs. public market bank loans and bonds
Downside mitigation
Private lenders have greater say over terms and pricing and are better able to negotiate protective debt and performance covenants
Lower volatility
Private debt delivers reliable income and is less susceptible to market fluctuations
Our key differentiators
Diversified, scaled platform with strong origination
Differentiated access to opportunities as a result of extensive relationships with corporate management teams, sponsors, banks and consultants.
Expert investment selection and structuring
200+ investment professionals globally, with cycle-tested experience in deployment, asset management and workouts, combining macro research with bottoms-up credit expertise.
Supported by the power of BlackRock’s platform
Leveraging technology solutions, risk management, and portfolio construction processes that support BlackRock’s more than $10tn AUM to make more informed investment decisions.
Ability to combine strategies to meet investor objectives
Build customized client solutions across the full private debt and liquid credit spectrum based on currency, fund structure and risk-return needs.
Investment strategies
Direct lending
Private loans to performing middle market companies
Why now?
- Rapid deployment: Strong and growing borrower demand for non-bank financing allows for rapid and highly selective deployment
- Income: Floating rate loans can deliver potentially higher income relative to similar public market debt in a rising interest rate environment
- Structural protections: Senior secured loans with bilaterally-agreed terms can provide downside protection rarely offered in public markets
Why BlackRock?
Differentiated sourcing
Highly selective, multi-channel approach to investment sourcing
Superior risk management
Experienced teams with global and local market perspectives
Proven track record
Established investment history and track record
Opportunistic
Capital solutions with complexity and illiquidity premiums
Why now?
- Dynamic flexibility: All-weather strategies designed to capture the best risk-adjusted opportunities regardless of the market environment
- Premium returns: Potential for equity-like returns with credit-level risk driven by predominantly income and some capital appreciation
- Downside mitigation: Bilateral negotiation affords structure and pricing influence and robust credit documentation, including comprehensive covenants and other protections
Why BlackRock?
Differentiated sourcing
Highly selective, multi-channel approach to investment sourcing
Superior risk management
Experienced teams with global and local market perspectives
Proven track record
Established investment history and track record
Growth debt
Operationally flexible loans to innovative, high-growth companies
Why now?
- Favourable market dynamics: Dynamics of venture & growth markets highly favourable towards a structured debt strategy
- Enhanced returns: Potential for equity-like returns with credit-level risk driven by predominantly income and some capital appreciation
- Downside mitigation: Target transactions only alongside top-tier equity sponsors. Focus on well-funded companies with long cash runways, experienced management teams, underlying profitability, and where senior-security available.
Why BlackRock?
Differentiated sourcing
Highly selective, multi-channel approach to investment sourcing
Superior risk management
Experienced teams with global and local market perspectives
Proven track record
Established investment history and track record
Infrastructure debt
Global platform investing in energy, power, renewables, transport, social and digital assets
Why now?
- Income: Potentially higher income relative to similarly rated corporate credit.
- Diversification: Historically, 2-2.5x lower loss rates and low default correlation3 to corporate credit; complements OECD core equity infrastructure.
- Liability matching: Longer maturity debt providing for 10-25 year+ liability matching.
- Inflation risk mitigation: Floating rate infrastructure debt may provide inflation management in a rising rate environment.
Why BlackRock?
Resilient performance
Zero credit losses or payment defaults across all 150+ assets since platform inception1
Experienced global team
34 investment professionals with senior members averaging 20+ years experience1
Longstanding platform
Ranked #1 globally with $20+ billion in client assets and $15+ billion deployed and committed to date1
Real estate debt
Diversified portfolio of income producing real estate assets across US and Western Europe
Why now?
- Market depth: Retrenchment of traditional lenders (banks) creates a large opportunity set for private lenders like BlackRock to meet borrower needs for refinancing and new capital.
- Risk-adjusted returns: Private market spreads widen as bank activity recedes; Combined with increased base rates, this has potential to boost returns across the capital stack and at all risk (LTV) levels.
- Diversification & Income: Significant diversification opportunities across regions, properties, sectors and loan types. Ability to adjust exposures to capitalize on prevailing market environment.
Why BlackRock?
Global expertise
Experience structuring and negotiating transactions to deliver relative value for clients for nearly 25-years
Access
Global presence and deep local relationships creates a large opportunity set
Execution
Clients seek BlackRock as a trusted partner with their capital across real estate debt
Multi-strategy debt solutions
Flexible single entry point to global solutions across the credit spectrum
Why now?
- Simplicity: Access to dedicated multi-credit teams improves efficiency and reduces governance complexity as clients seek to do more with fewer managers
- Flexibility: Active allocation across opportunities in global credit as the market evolves
- Transparency: Holistic view of credit exposures improves risk oversight while delivering integrated reporting
Why BlackRock?
Global expertise
Knowledge and insights across asset classes and sectors
Risk & technology edge
Risk management foundation and dedicated teams, powered by Aladdin®
Proven track record
Established investment history and track record in multi-credit portfolios
BlackRock team
Latest insights
Private Credit: Further confirmation of its staying power
The piece addresses the increase in partnership activity between banks and private credit lenders, as the financial ecosystem continues to evolve.
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