This episode is sponsored by Barings

Diversifying strategies is hugely popular with investors right now – and for good reason. Macroeconomic upheaval is prompting LPs to take a closer look at their credit portfolios and evaluate where their capital can deliver the strongest relative value.

Enter portfolio finance. The strategy is by no means new, but it is gaining traction among institutional investors for its intrinsic diversification and capital preservation properties.

In this episode of The Private Debt Investor Podcast, we speak with Dadong Yan, Barings’ global head of portfolio finance, based in Boston, and Matt Hansford, a portfolio manager in the European team, about the spectrum of opportunities available in this segment of the market.

For professional investors/institutional only. This podcast should not be distributed to or relied on by retail/individual investors. Any forecasts in this material are based upon Barings opinion of the market at the date of preparation and are subject to change without notice, dependent upon many factors. Any prediction, projection or forecast is not necessarily indicative of the future or likely performance. Investment involves risk. The value of any investments and any income generated may go down as well as up and is not guaranteed by Barings or any other person. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

Private Debt Investor’s Europe Summit brings together leading industry figures for two days of networking and panel discussions, where artificial intelligence, the democratisation of private markets and the rise of asset-based lending were among the key targets for analysis.

In this episode, PEI Group’s special projects editor Hannah Roberts speaks with Private Debt Investor editor Andy Thomson and news editor John Bakie to provide further insight into these agenda-setting topics and examine where the market may be headed next.

Having shot to prominence in the early part of this decade, have sustainability-linked loans (or SLLs) become an enduring part of the private credit landscape? Or have they quietly gone out of fashion?

In this special edition of the podcast, co-hosted with PEI Group affiliate publication New Private Markets, we seek to chart the rise of sustainability-linked loans and assess how they are being used today.

To recap: these loans feature a margin ratchet whereby the borrower’s performance against certain sustainability targets can result in a lower interest rate in the case of outperformance, or an increase in the case of underperformance.

To help us assess the situation, we enlisted Nishan Srinivasan, head of origination and partner at Ambienta Credit. Since its inception in 2007, Ambienta has invested in companies operating in the realms of environmental and resource efficiency. Srinivasan spent 22 years at Credit Suisse, latterly as global co-head of leverage finance origination. He joined Ambienta in 2023 to help launch its credit platform.

In the early days of SLLs it was not uncommon to see ratchets of 5 basis points relating to sustainability goals that were easily achievable, says Srinivasan. “Typically this was, dare I say, window dressing,” he said. “Quite de minimis in the context of the cost of the loan”.

Fast forward to today and the targets are more ambitious, the discounts more meaningful – as much as 40bps – and there is more frequently a margin uplift in the event of failure.