NEW YORK--(BUSINESS WIRE)--Jan 11, 2023--

KBRA releases its 2023 Financial Institutions Sector Outlook, examining positive attributes of private equity (PE) and private credit asset managers and mitigants for economic headwinds. During this period of increased funding stress, certain asset classes stand out as particularly resilient owing to stronger business model fundamentals. PE and private credit asset managers are among these fundamentally stronger asset classes, reflecting a business model that emphasizes resilient and relatively stable management fees augmented by the ability to generate considerable performance-based and co-investment revenues over time. In addition, these firms have an ability to ride out business and market cycles due to the flexibility built into expense structures and a focus on long-term fund structures with limited redemption and net asset value (NAV) risk.

KBRA rates 40 asset managers, the vast majority of which focus on PE and private credit strategies—aggregating approximately $2.6 trillion in assets under management (AUM). These positive attributes will likely enable KBRA-rated asset managers to better navigate the emergent challenges when compared to most types of financial institutions, even as rising interest rates, persistent inflation, and a weakening economy present headwinds to performance across the credit ratings spectrum. KBRA’s average rating in the A category recognizes these comparative strengths combined with relatively modest debt levels at management companies. KBRA’s rating Outlook for this sector remains Stable. The bulk of these ratings are unpublished and related to privately placed debt totaling $18 billion.

Click here to view the report.

Related Publications

• KBRA Insight on Private Credit: Well Positioned to Navigate the Looming Storm
• KBRA Insight on Private Credit: 12% Is Not Affordable for Many Borrowers
• Private Credit Funds in Pictures: Safety in Numbers

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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CONTACT: Corinne Hill, CFA, Senior Director

+1 (646) 731-3331

corinne.hill@kbra.comJoanna (Asia) Drobnik, CFA, Senior Director

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asia.drobnik@kbra.comClaudia McPherson, Senior Director

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claudia.mcpherson@kbra.comAshley Phillips, Senior Director

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ashley.phillips@kbra.comJoseph Scott, Senior Managing Director

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joe.scott@kbra.comBusiness Development ContactConstantine Schidlovsky, Senior Director

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constantine.schidlovsky@kbra.comMedia ContactAdam Tempkin, Director of Communications

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adam.tempkin@kbra.com

KEYWORD: UNITED STATES NORTH AMERICA NEW YORK

INDUSTRY KEYWORD: BANKING PROFESSIONAL SERVICES FINANCE

SOURCE: KBRA

Copyright Business Wire 2023.

PUB: 01/11/2023 03:00 PM/DISC: 01/11/2023 03:03 PM

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