Asset-Based Finance: A Fast-Growing Frontier in Private Credit

KKR

Research

17 Pages

KKR Private Credit explains how private asset based finance has become a major part of the modern credit ecosystem. The piece traces its rapid post crisis growth, from banks stepping back to nonbank lenders building large, collateral backed platforms. It argues that a market of roughly 5.2 trillion dollars in private asset based finance can diversify portfolios and support inflation sensitive income.

Date published: October 31, 2022

Key Takeaways

Private ABF defined: Investments in pools of loans, leases, and receivables backed by specific collateral instead of corporate balance sheets.
Growth drivers outlined: Bank retrenchment, regulation, and technology shifts push more financing from traditional lenders toward specialized private credit platforms.
Portfolio role explained: Asset based finance can broaden credit opportunity sets, lower correlation to corporate debt, and offer potential inflation resilience.
As of May 2023
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