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It was a crisp September day in 2015 when Timothy Young arrived at Houten, an unremarkable Dutch commuter town, determined to collect an almost 400-year-old debt. He carried a case containing a fragile piece of goatskin covered in dense writing and numbers. It was a bond, issued in 1648 by a group of Dutch landowners, who managed the dikes on a stretch of the river Lek. They had borrowed 1,000 guilders from a local merchant and the bond explained that, in return for the loan, the merchant would receive a 5 per cent interest payment every year — for ever. Although the terms of this so-called “perpetual” bond have changed over centuries of wars, depressions, revolutions and new currencies, it is still a valid liability of Stichtse Rijnlanden, a Dutch utility, and is now owned by Yale University’s Beinecke Library. Young, a curator at Yale, was collecting €136 of interest from a delighted Dutch official, who had made a giant cheque to commemorate the payment. For Young, the biggest thr...

Private credit is a type of debt financing provided by non-bank lenders that is not issued or traded in an open market. • Private credit strategies like direct lending can offer an attractive option for investors looking to generate higher yields and diversify their portfolio from traditional fixed income. • Direct lending tends to provide more conservative risk-return profiles than leveraged loans and high yield bonds. • For investors willing to lock up capital and commit for an extended period, direct lending offers access to an asset class with appealing enhanced yield and downside mitigation. What is Private Credit? Private credit is a type of debt financing provided by nonbank lenders that is not issued or traded on an open market. Companies, usually small to mid-sized, that often cannot or choose not to access public markets for debt financing, will turn to the private markets. In a capital structure, private credit acts just like public debt, sitting below equity (Fig 1). Unlike...

Chase Coleman’s Tiger Global has built a big stake in private equity group Apollo Global as the hedge fund looks outside of the technology investments that have been its mainstay in recent years in a hunt for better returns. The investment in Apollo, which Tiger described as a “leading global alternative investment manager” was revealed to investors in a mid-year letter seen by the Financial Times. It did not disclose the size of the stake but its decision to draw attention to it is a sign that it is large. Tiger, founded by Coleman in 2001, amassed the stake this year and has also “selectively added” other new holdings in the aerospace and healthcare sectors, according to the letter. Tiger declined to comment. The push into non-tech companies comes amid a recovery in Tiger’s main hedge fund, which at the half-year point of 2022 had lost about 50 per cent of its value compared to 2021. Tiger’s flagship fund and a “crossover” fund sold to wealthy individual investors have gained mo...

A lucrative age for private equity buyouts has ended, prompting an abrupt shift in the $4tn industry where returns will no longer be fuelled by rising valuations, the chief executive of Apollo Global Management warned on Thursday. “In the [private] equity business, this year has really marked the end of an era,” said Marc Rowan, whose Apollo is one of the world’s biggest private equity groups with $617bn in assets. A decade of “money printing”, fiscal stimulus and low interest rates that had pulled forward economic demand “is in retreat”, he added. His warning comes as investors face a period of lower growth and higher interest rates, which have raised the buyout industry’s cost of borrowing to take companies private. Private equity groups enjoyed an extraordinary run of profitability in the past decade as low financing costs and buoyant financial markets made it easy to sell investments for a gain. Private equity firms would be forced “to go back to investing in the old-fashioned...

Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour. https://www.ft.com/content/e673c1f8-b23f-40ac-874c-cf58d038e657 If a reminder were needed that we are living in a material world, it emerged this week in the once-stuffy profession of corporate law. The US firm Paul, Weiss, Rifkind, Wharton & Garrison raided its larger rival Kirkland & Ellis for several top private equity partners, the kind of people who get paid up to $20mn a year. It is another nail in the coffin of loyalty, which used to keep lawyers at elite firms in London and New York in place for their entire careers. They advanced steadily in lockstep, being paid more as they got older and more se...

Rising U.S. Debt Is the Mirror of Rising Chinese Debt Both Washington and Beijing treat rising debt as a consequence of irresponsible behavior by local institutions. But in China and the United States, rising debt is spurred by policies that have encouraged distortions in the distribution of domestic income. Until these distortions are addressed, both countries must choose between rising debt and rising unemployment. The urgent debate earlier this year about the establishment of a binding debt ceiling for the U.S. government implicitly (and sometimes quite explicitly) assumed that rising debt is a measure of Washington’s profligacy, and that if only policymakers were a little more frugal or a little less irresponsible, the American debt burden would stop rising. The purpose of the debt ceiling, by this logic, is to impose discipline on lawmakers. There is a similar debate within China about the surge over the past ten to fifteen years in local government debt. The press is full of st...