Investment Approach

Investment
Approach

Why Consider Global Corporate Credit?

Increasing regulations and higher capital requirements have constrained commercial bank lending, making capital more difficult to access. We believe the pullback of traditional lending from commercial banks is creating investment opportunities for established providers of global credit. High quality companies around the world will require access to capital to fund their day-to-day operations, research and development, reinvestment, growth and expansion.


A Void of Traditional Lenders

In response to the recent recession and changing regulatory environment, U.S. and European commercial banks are strategically repositioning and limiting their financing capital to corporations. The resulting supply/demand imbalance is creating an opportunity for alternative capital providers to fill this need.

European Banks Reduce Lending

Historically, the financing needs of European corporations were met by European banks lending within their own country and in Europe broadly. As a result of regulatory pressure, European banks have reduced the amount they lend to non-financial institutions by €565 billion since 2008. As a result, European corporate borrowers will seek alternative forms of capital, such as that provided by NorthStar Corporate Income.

Strong Demand for the Foreseeable Future

It is estimated that U.S. and European companies will need to refinance over $2.0 trillion of corporate debt through 2021. As existing debt comes due, established companies will need new, reliable credit sources, thus creating investment opportunities for knowledgeable and experienced providers of capital with a global footprint, such as NorthStar Corporate Income, to provide financing.

1) S&P Capital IQ Leveraged Commentary & Data, LCD’s Leveraged Lending Review - 4Q15. Copyright 2016, S&P Capital IQ (and its affiliates, as applicable). Reproduction of LCD Comps in any form is prohibited except with the prior written permission of S&P Capital IQ, or S&P. None of S&P, its affiliates or their suppliers guarantee the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions, regardless of the cause or for the results obtained from the use of such information. In no event shall S&P, its affiliates or any of their suppliers be liable for any damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with any use of S&P information. 2) European Central Bank, as of December 31, 2015. 3) Credit Suisse, CS Credit Strategy Default Review (January 22, 2016).

 

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