Caisse Warns of Giant Risk in Private Debt
Paula Sambo of Bloomberg News reports that the Caisse sees giant risk growing in corner of the private-debt market:
Direct lenders and big banks are competing for the largest companies in the red-hot market for private credit, which is eroding underwriting standards, according to Canada’s second-biggest pension fund manager.
“The bigger, more solid companies are closer to having access to capital markets, so there’s a bit more erosion there because you have large direct lenders that are competing with each other,” along with the big banks to offer credit, said James McMullan, head of corporate credit for Caisse de Depot et Placement du Quebec, which has about $327 billion under management.
Like other asset managers, the pension fund is working to increase its exposure to higher-yielding private credit, but is doing so slowly as finding and screening companies is labour intensive, said McMullan. The Caisse currently holds around US$4 billion in the market, part of its US$41 billion cre…
Direct lenders and big banks are competing for the largest companies in the red-hot market for private credit, which is eroding underwriting standards, according to Canada’s second-biggest pension fund manager.
“The bigger, more solid companies are closer to having access to capital markets, so there’s a bit more erosion there because you have large direct lenders that are competing with each other,” along with the big banks to offer credit, said James McMullan, head of corporate credit for Caisse de Depot et Placement du Quebec, which has about $327 billion under management.
Like other asset managers, the pension fund is working to increase its exposure to higher-yielding private credit, but is doing so slowly as finding and screening companies is labour intensive, said McMullan. The Caisse currently holds around US$4 billion in the market, part of its US$41 billion cre…
