DIVERSITY IN DIRECT LENDING
>> 5
Federated Hermes to expand offering
CYBER WARS
>> 16
Managers shore up their security
AXA IM Alts’ Christophe Fritsch on CRE debt, ELTIFs and defaults >> 12
ISSUE 103 | MARCH 2025
Barings’ European private credit boss heralds scale and incumbency for direct lending success SCALE and incumbency are highly important when competing in a crowded direct lending market, according to Barings’ head of European private credit and capital solutions Stuart Mathieson. Lower interest rates on what are typically floating rate products, combined with an influx of new players into the space, have made it more challenging for managers. Barings’ longstanding private credit platform has a $50bn (£41.4bn) capital base and Mathieson (pictured)
says it is this scale and incumbency which give it a competitive edge. “The incumbency means that not only are we talking to the sponsors all the time, so we are able to see and compete on new platform deals, but we also benefit from significant offmarket transaction flows,” he added. “We have a very diverse mix of capital, which puts us in a very strong position to be competitive. I think it's a very difficult business to start when you're small
because you don't have that diversity, you don't have that incumbency that drives the off-market
piece, and therefore to build scale quickly is really, really difficult.” While Mathieson concedes that some new managers will be successful, he notes that some big brands have tried to enter the space and exited. “If you think about running a credit portfolio, diversity is a real benefit to investors,” he added. “While there are a lot more fund managers coming into the direct lending space, I think the market is set up for those who have scale and >> 4