Private Equity Firms Beating Out Banks In Alternative Lending

banks, bank

With investors scrambling to find the best yields for their money’s worth, alternate asset firms are growing more and more appealing—and the constant influx of cash has put firms at an advantage when it comes to corporate lending.

Take private equity firm Thoma Bravo for example. When the firm moved to buy Qlik Technologies in the spring, it sought a loan to help pay the $3B price tag—and though bank offers were made, investment firm Ares Management beat those offers. Ares arranged for a $1.1B loan—roughly $200M more than banks were willing to lend, the Wall Street Journal reports.

Though banks are still the primary source of corporate lending, traditional investment firms have ramped up their lending services in recent years, putting added pressure on banks. The firms typically receive large flows of cash from clients that allow them to make these loans available. [WSJ]

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