After a prolonged deal-making slump, private equity transactions are beginning to be fuelled by an “explosion of private debt”, according to Ken Jacobs, the Chief Executive Officer of Lazard, a financial advisory and asset management firm and one of the world’s largest private banks.
A report by Bloomberg quotes Jacobs as saying in a telephone interview on Thursday that: “The growth of the private credit markets has really supercharged the ability of companies to get financing.”
Jacobs added that he expects that more readily available financing will fuel an uptick in mergers, while companies restructuring their finances may avoid bankruptcy, given the willingness of private debt firms to provide more capital.
And Lazard is expecting larger firms, as well as small to midsize businesses, to start turning to private debt funds, which could help the M&A market recover from the 40% drop seen so far this year, according to data from Bloomberg.
