At this year’s Milken Institute Global Conference, I was struck by the number of conversations discussing the convergence of public and private credit markets. One of the main drivers behind this convergence is the growing demand for liquidity in private credit as investors have recognized the importance of secondary market access – even in traditionally illiquid markets.

As nearly every private credit investor also has a large and active public credit/ broadly syndicated loans arm, structural similarities between private loans and syndicated debt are bringing these worlds closer together.

Recent market volatility has only accelerated the search for stability. During the conference, credit investors and sponsors highlighted how geopolitical and market trends have made predictability in both credit markets more elusive. Issuers understand that private credit and syndicated debt investors often belong to the same pool.

In the past, direct lending facilities were allocated to a handful of lenders in so-called “club deals,” but robust fundraising and a rapid rise in the number of new funds have led to private credit transactions regularly exceeding $1 billion and more than 20 investors piling into syndicated debt deals.

Many of these allocators participate in both private and syndicated transactions; for example, among the five largest private credit investors, four are also ranked among the top ten syndicated investors, sometimes even relying on the same analytical teams.

As private credit syndicates have grown, the processes for raising money, amending documents, and investor interactions have become increasingly similar to those in syndicated deals.

Making sure to have a financial partner with expertise across the private credit spectrum as well as with syndicated deals is essential for navigating these shifting dynamics.

Given our longstanding and successful joint ventures with Oak Hill Advisors and Canal Road Group, BMO is uniquely capable of providing the right advice and financing structures for both syndicated and private market access.

Looking ahead, economic uncertainty will continue to shape the outlook, making both private and public markets vital for financing solutions. At BMO, we take great pride in our record of providing clients with crucial advice and stable capital solutions, especially through our private credit partnerships.