Nomura Capital Management

We are looking forward to being a part of Future Proof Festival 2024! Come visit us at Booth 104 and let’s talk #PrivateCredit! #futureproof2024 #wealthmanagement

Excess yield in #PrivateCredit is derived from multiple forms of risk premia. Read more on the Relative Value Across the Credit Spectrum on our Q3 Market Outlook at: https://lnkd.in/eikr-jis

We believe #PrivateCredit markets continue to offer relatively attractive credit opportunities. Opportunities exist as a wave of demand from borrowers is met with regional bank departure from the lending business. Read more on the Relative Value Across the Credit Spectrum in our Q3 Market Outlook at: https://lnkd.in/eikr-jis

In light of recent market turbulence, Matt Rowe, our Head of Portfolio Management and Cross Asset Strategies, highlights several factors investors should consider. “There’s still a lot of uncertainty ahead on many levels: monetary policy, geopolitical, the outcome of an election. And equities coming from a point of valuations that were historically very high,” he notes. Read more in Bloomberg: https://lnkd.in/e2F_8Z7G #InvestmentStrategy #EconomicOutlook #Volatility

In a recent interview with John Sage of Bloomberg, our Chief Investment Officer Matthew Pallai shared his take on the evolving private credit landscape. He highlighted the growing interest in interval funds, noting “We were looking at the growth in the space over the last few years and view BDCs as starting to mature.” Read more: https://lnkd.in/e6uu3pxg #PrivateCredit #IntervalFunds #CapitalMarkets

Following Friday’s weaker-than-expected jobs report, our Head of Portfolio Management and Cross Asset Strategies Matt Rowe highlighted how the data was being treated as an inflection point. He noted, “The bad news is being treated as 'bad news.' Prior to (Friday), bad economic data was treated as a positive as it increased the likelihood of a rate cut and that fueled equity beta appreciation." Read more in Reuters: https://lnkd.in/evS4gean #EconomicData #Unemployment #Economy

“Restrictive policy from the Fed doesn’t impact the market immediately,” notes Matt Rowe, our Head of Portfolio Management and Cross Asset Strategies, in a conversation with Sarah Hansen of Morningstar. He shared his take on the Fed’s “wait and see” approach, noting certain lagged effects of higher interest rates may not have found their way into economic data yet. Read here: https://lnkd.in/e3RB-xRx #MarketTrends #FedPolicy #EconomicOutlook

Is There Too Much Capital Chasing Private Credit? We believe the answer is “NO” from a combination of push and pull factors. The private equity community has had 2 years of a lagging distribution rates relative to average, creating the need for credit liquidity solutions such as asset-based lending on existing assets and portfolios to enable private equity (“PE”) owners to return capital to LPs. Read more on the Macroeconomic Environment on our Q3 Market Outlook at: https://lnkd.in/eikr-jis

Macroeconomic Environment – Is There Too Much Capital Chasing Private Credit? We believe the answer is “NO” from a combination of push and pull factors. • There were almost 15k FDIC-insured commercial banks in the 1980s vs. ~4k today while the US economy has grown from GDP of $2.857 trillion in 1980 to $28.26 trillion today. • Both large and small bank excess deposit growth was meaningfully negative in 2023 and remains flattish to negative in 2024. • As small banks lose deposit, it will be harder for small and medium enterprise corporations (“SMEs”) to secure loans from the traditional banking sector. Read more on the Macroeconomic Environment on our Q3 Market Outlook at: https://lnkd.in/eikr-jis

Delinquency rates continue to rise as consumers struggle with higher cost of debt and less available credit. Some aspects of consumer inflation, such as insurance costs and geo-political turbulence, cannot be controlled by monetary or fiscal policy. Read more on our Q3 Market Outlook at: https://lnkd.in/eikr-jis