The first signs of distress may be starting to emerge in the private credit boom
One of Australia's largest insolvency and restructuring firms, McGrathNicol, said it has started to receive inquiries from private credit investors on how to manage distressed assets.
Private credit providers are starting to see the first signs of distress in their loan books, according to one of Australia’s largest insolvency and restructuring firms McGrathNicol.
McGrathNicol’s restructuring and turnaround partner Kathy Sozou told a media briefing on Tuesday that investors in distressed debt and private assets were starting to see risks emerge in their underlying investments but did not have the skills internally to manage them.
“It's actually now [things are] starting to go a little bit wrong... and [they] don't quite have the skills internally to know what we do here. There’s been more of those initial inquiries… they’ve been riding high as they got in low when there was plenty of liquidity around and it was all fine. Now they’re like ‘oh, this might actually hit one of our [loans]',” she said.
“Some private credit providers are starting to lean on our expertise in terms of holding their hand through that distress process. I think there’s investing in a distressed situation and seeing the potential value but it’s not always good if it then becomes more distressed.”
