Apr 2023

Senior Debt - The Overshadowed Opportunity Now Emerging in Private Credit

In the last week of March, Pensions & Investments published thought leadership co-authored by Audax Private Debt Managing Directors Dinko Angelov and Sean O’Keefe. The article, “Senior Debt – The Overshadowed Opportunity Now Emerging in Private Credit,” explored how the evolving economic backdrop and shifting supply-and-demand dynamics in the syndicated loan market is influencing middle market private debt activity.

“The volatility across the bond markets is overshadowing a distinct opportunity that now appears to be taking form at the very top of the capital structure, in senior debt,” wrote Angelov and O’Keefe in the op/ed. “Lenders who cater to private equity’s middle market may be uniquely positioned to benefit from the disruption.”

In addition to other factors, Angelov and O’Keefe highlighted how the slowdown in broadly syndicated loan activity is allowing direct lenders in senior debt to pick up market share and at the same time benefit from higher yields and more robust documentation.

Dinko Angelov, who joined Audax Private Debt in 2008 as one of the early members of the senior debt investment team, is a Managing Director at the firm. Sean O’Keefe, also a Managing Director on the senior debt investment team, joined Audax in 2012 from Goldman Sachs.

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Based in New York, Audax Private Debt is a leading middle market debt capital provider with $20 billion of assets under management. Audax established its senior debt platform in 2007, which invests primarily in traditional, first lien senior secured loans and, more selectively, in second-lien and untranche/stretch senior loans. The strategy will make investments up to $125 million in size in sponsor-backed companies with EBITDA between $10 million and $100 million.