On market development, Patel observes broadening participation from managers and capital providers, with key opportunities lying in segments underserved by banks, such as small/medium business lending, esoteric assets and consumer finance. Patel says: “The last year has seen strong growth in asset-based credit, with more managers launching dedicated strategies and forming partnerships with banks to access quality deal flow. This evolution is driven by increased demand and a regulatory environment pushing banks to de-risk, particularly in Europe.”
Asset-based credit is gaining share in private markets as banks reduce risk and investors look for yield and resilience. Sachin Patel, managing director of the speciality finance team at Neuberger Berman, frames the backdrop as favourable. “The outlook for private markets, particularly asset-based credit, remains constructive despite macroeconomic volatility. Regulatory changes and ongoing bank retrenchment have created opportunities for private capital to serve creditworthy borrowers at attractive risk-adjusted returns,” he says.
From his perspective, periods of volatility have historically provided attractive entry points for private lenders to step in where traditional funding recedes. With regulatory tightening persisting, this trend is set to continue. Patel points to a sharper pivot towards private lenders as regulatory pressure nudges banks to conserve balance sheet capacity. He adds that these conditions tend to widen the opportunity set for specialist managers while improving prospective entry points for new capital.
