Fund giants want a piece of the $1.5T private credit action

investmentnews.com:

Investcorp SA’s Jeremy Ghose is a popular man. Ever since the $50 billion firm snapped up alternative-credit manager Marble Point late last year, he’s been juggling calls from bankers and firms pitching similar deals.

“People know we’re in acquisition mode and they know we have the ability to write checks,” says Ghose, managing partner and chief executive officer of Investcorp Credit Management, the Bahrain-based firm’s lending arm. The $200 million purchase of Marble Point, a specialist in collateralized loan obligations, added $7.8 billion of assets-under-management to his division.

Investcorp isn’t the only show in town for private-credit firms hunting buyers. Deutsche Bank AG’s asset manager DWS Group and Janus Henderson Group Plc both say they’re looking to buy. In an interview with Bloomberg News, Janus Henderson CEO Ali Dibadj says he’s weighed up about 100 opportunities since taking the top job in June last year, without buying any firms. About half involved alternative assets such as private capital.

While the past 18 months have been pretty miserable for M&A bankers, the recent surge in interest in private-credit deals is a rare bright spot. This once niche market has become a $1.5 trillion behemoth, and the fund-management giants — attracted by bumper fees and the retreat of banks from corporate lending — want in. At the same time smaller credit firms are finding it hard to raise funds lately. Many want to cash out.

“The key thing is what’s driving the M&A,” says Ghose. “It’s consolidation, it’s big asset managers coming into the space and also consolidation among the alternatives firms. It’s been very active.”

William Barrett, managing partner at Reach Capital, a private-market fundraising firm, says there’s