HPS Investment Partners is building out its fund finance business, including net-asset-value lending. “It’s a huge opportunity,” Purnima Puri, head of liquid credit and a founding partner at the $150 billion firm, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Tolu Alamutu in the latest Credit Edge podcast. “Exits for private equity sponsors have been somewhat limited and it’s one way to get some capital back to their investor group, which I think is super important,” says Puri. They also discuss how HPS is positioning for stagflation, the private-debt deal pipeline, relative returns, slim recoveries and liability-management exercise “brain damage.”

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Barings Sees Global Credit Investor Pivot to Europe (Podcast)Demand for European corporate debt is rising as global investors seek to diversify out of US markets, according to Barings, the $442 billion asset manager. “US exceptionalism is a little bit more questioned, investors are increasingly concerned about US economic policy,” Mike Best, a high-yield and senior loan portfolio manager at the firm, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Stephen Flynn in the latest Credit Edge podcast. “That will probably in the near term, create a very strong technical demand for European assets,” says Best, who’s taking more calls from investors seeking exposure to non-US markets. Best and Flynn also discuss risks and constraints in European credit, retail distress, communication sector winners and loser, plus how to trade liability-management exercises.

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When the credit cycle turns, “the game will be over” for some private debt funds that are overly exposed to weak companies, according to Silver Point Capital. “We see every deal that’s getting done — there’s some good deals and there’s some bad deals,” Michael Gatto, the firm’s head of private side businesses, tells Bloomberg News’ Irene Garcia Perez and Bloomberg Intelligence’s David Havens in the latest Credit Edge podcast. “If someone is doing too many bad deals, they won’t exist,” says Gatto, referring to what generally happens when debt market liquidity dries up. Gatto and Havens also discuss Silver Point’s approach to private credit, the growth of liability management exercises and disqualified lender lists.

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