October 17, 2024MFA Report
White paper: Private credit data is readily available and fit for purpose
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White paper: Private credit, strategies for sustaining success
Scaling your business to manage growth
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The rapid growth of private credit funds has led to a maturing, competitive market. For managers of private credit funds to continue to grow assets while managing operational and regulatory risk, it is important to achieve economies of scale and use technology to operationalize and automate critical functions in the loan origination and credit review processes. The ability of a fund manager to scale operations – without upping headcount – to meet investor service expectations can be an important differentiator for profitable lending and controlling management expenses.
This paper details certain key challenges private credit fund managers face in managing growing loan volumes and how intelligent technology can help managers mitigate operational risk while developing scalable processes that work across multiple loan types and varying market conditions.
The growing popularity of private credit as an alternative to traditional fixed income has attracted many new entrants into the private credit space, from newly-formed managers to established asset managers that have developed (or acquired) private credit expertise, to traditional banks that have begun offering private credit investments through an affiliated asset manager. The result is an increasingly crowded marketplace where multiple managers are competing for the same investor base and for the same universe of middle-market loans. In the face of increased demand, higher transaction volumes and strong competition, the challenge for fund managers is to scale their private credit business, increase processing capacity and optimize operational performance in order to compete effectively and grow profitably.
