As private credit continues to attract more capital and expand into new areas of the market, ORIX USA’s Group Head of Direct Lending Nik Singhal spoke with Private Debt Investor to discuss the importance of taking a disciplined approach amid this surge of capital in order to build resilient portfolios and deliver consistent returns across shifting market environments.
Highlights from Nik:
- “Direct lending has done its job,” says Nik Singhal, group head of direct lending at ORIX Corporation USA, referring to its performance relative to leveraged loans and high-yield bonds over the past two decades. “But, because of that, a lot of capital has flown into the space. Capital has gone to many investment managers. Some may have taken a disciplined approach to deploying that capital, doing more of what they know, versus [those] hastily expanding into areas they’re not prepared to go into.” Singhal adds that this same concept could apply to areas of direct lending.
- Banks are still firmly in control of ABF deals, accounting for what market participants say is around 90 percent of activity, though many are scaling back operations due to regulatory concerns. Even just a 1 or 2 percent retraction represents tens of billions of dollars’ worth of opportunity for private lenders to capture, says ORIX’s Singhal.