Gareth Henry was recently interviewed for an article published on the Daily Forex Report website titled “An Overview of Private Credit with Gareth Henry.” The article was written by Clara Davis to demonstrate all the risks and benefits of investing in private credit funds.
Gareth Henry reveals there are a variety of different kinds of private credit funds like the mezzanine loan, senior loans, distressed credit, and capital appreciation strategies. Mezzanine loans are generally junior capital funds that are a mix of debt and equity for small and midsized businesses. The mezzanine loans are loans that are made to help companies create room for buyouts. The majority of the return is made from the interest of the payout and can often have returns in the double digits. Senior loans are a more direct lending system that uses a first of second lean for smaller companies. It is similar to the mezzanine loan in the sense that it is used to help finance buyouts and create expansion opportunities. The returns made from senior loans are generally 6-10%, according to Gareth Henry.
Capital Appreciation is more associated with private equity. The investments focus on buying debt or equity when the borrowers are looking to bring in capital but do not want to give up their control over the loan. The borrowers use lenders to create capital while still maintaining control. The returns are higher than average because many want to avoid spreading out the ownership too much. Distressed credit is a private equity investment opportunity for larger capitalized firms that have poor credit. This could be caused by defaulting on their loans or restructuring their loans. To know more about him click here.
Gareth Henry reveals that keeping an ear to the ground in the world of private credit investing is important because it can be a great investment opportunity. Henry suggests that making sure you are constantly in contact with the clients and the companies allows the investor to get a greater idea of the full picture. This can help you understand the client’s needs or investment goals to be able to match them with the perfect private equity investment opportunity.