International law firm Proskauer has surveyed over 100 of its private credit clients to better understand the impact of the Covid-19 pandemic on the market.“Despite the unprecedented challenges our clients are facing, the overwhelming number of respondents reported that they are open for business. In fact, 86 per cent said they are actively looking for new lending opportunities,” says Stephen Boyko, co-chair of Proskauer’s Corporate Department and Private Credit Group. “While these are extraordinary times, the responses to our survey demonstrate that private credit firms are looking for deals, there is meaningful liquidity in the market, and that our clients are prepared to provide additional capital to support their portfolio companies.”
The survey also reveals that 97 per cent of investment professionals are willing to provide additional capital to their existing borrowers, while 78 per cent of respondents are interested in non-distressed senior secured loans/refinancings. In addition, 74 per cent are interested in in acquisition financings; 48 per cent in special situation loans and 30 per cent in DIP/exit facilities.
Market sentiment for investment in certain industries has declined since our annual survey in January. Industries that have experienced the most significant decline are: manufacturing down from 67 per cent to 36 per cent, consumer goods from 43 per cent to 30 per cent, education from 62 per cent to 51 per cent, energy from 28 per cent to 18 per cent, construction 35 per cent to 28 per cent and real estate from 18 per cent to 12 per cent.
On the other hand, survey respondents report that they continue to look for investment opportunities in the healthcare (94 per cent), business services (93 per cent) and software and technology industries (92 per cent), which is generally consistent with the results from our annual survey in January.
This survey was conducted between 30 March and 3 April and includes insight from 112 investment professionals, a majority of which are partners or managing directors at their firms. The firms that responded to our survey collectively manage more than USD1 trillion in assets.