Akin's Global Capital Solutions Team just launched "Capital Solutions: An Ever-Expanding Universe," where we explore the evolving landscape of private capital investments.
More and more companies are seeking access to private capital and all it has to offer. In pursuit of these capital solutions, the traditional boundaries between private equity buyouts and private credit lending have blurred.
Here are five surprising takeaways:
1. Investment Grade Public Companies Pursue Private Capital
Faced with high interest rates, market volatility and shareholder scrutiny, investment grade public companies are increasingly turning to private capital solutions because of their ability to deliver patient, creative funding.
2. Blurring the Lines: Debt and Equity Investors
The distinction between debt and equity investments is becoming blurred, highlighting a trend driven by the need for capital that is tailored to the unique challenges each company faces.
3. Creative Sourcing to Generate Alpha
To unlock value in capital solutions, private capital providers must adopt a broader sourcing aperture – expanding their horizons to include both public and private companies and looking beyond the banker run processes.
4. Tactical Shift: Fund Managers Consider Investments from Competitors
The traditional taboo surrounding investments from competitors is dissipating as fund managers are increasingly willing to accept fund and manager liquidity solutions from a diverse range of sources, including competitors.
5. LPs Rethink Broad Fund Mandates
Limited partners (LPs) are becoming more open to broad fund mandates, allowing fund managers to deploy capital across a wider range of strategies and asset classes in a single fund structure.
Conclusion
These are just some of the surprising developments that speak to the expanding universe of capital solutions. By adopting a broader sourcing aperture and offering bespoke financing solutions, private capital has the ability to generate outsized alpha while meeting the complex needs of key stakeholders.
Read the complete report, "Capital Solutions: An Ever-Expanding Universe."
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