Private capital – including private credit – is increasingly becoming a “key player” in the UK financial services market, according to Charlie Ring, partner at law firm Charles Russell Speechlys, which focuses on private capital.
Ring said that private credit has surged to the forefront of M&A activity, with many “transformative transactions” quietly powered by private capital, including private credit-funded insurance sector carve-outs.
Read more: Private corporate debt: A strategic fit for DC defaults
“Private credit has emerged as a particular game-changer. With over $2tn (£1.48tn) in global assets under management, direct lenders have the capability to offer bespoke financing solutions traditional banks can’t often match, especially in what is a regulatory-heavy environment with a high cost of debt,” he said.
“This has led to a welcome enablement in the UK for mid-market deals that might otherwise have stalled. We foresee this trend only continuing: private capital is a growing and is increasingly key player in the UK financial services market.
Read more: Nearly half of US pension savers would invest in private assets
“As interest rates stabilise and political uncertainty recedes, dealmakers will look to deploy dry powder in strategic, high-return sectors. Financial services – with its recurring revenue, regulatory barriers to new competitors, and digital potential – is likely an ideal target.”
He added that private credit deals “come with their complexities”, and said a combination of regulatory and corporate expertise in the space is crucial to success.
Read more: Private credit ‘catching on in New Zealand’
