Financing the Middle Market: Growth and Evolution

Abstract

Middle market lending has become a highly competitive environment, both in terms of lenders competing for transactions as well as the capital structures and financings that support the market. As the array of products offered by middle market lenders becomes more complex, so does the method by which those lenders seek to finance those offerings. The increasing interest in the middle market from investors and asset manager has led to an evolution in the market and diversification of the investor base as middle market lenders seek to achieve their desired returns.

TOPIC: CLOs, CDOs, and other structured credit

Key Findings

• • Middle market lending has become increasingly competitive for lenders and increasingly attractive for investors.

• • Availability of non-traditional financing sources to middle market lenders has caused a fundamental shift in the role of such lenders from providers of capital to asset managers.

• • The number and structures of financing products available to middle market lenders have increased and evolved to meet the increased demand and diversification of investors for middle market loans.