At Parkview Capital, we bring to the table a wealth of combined investment management, private equity, direct lending experience and strong equity sponsor relationships. We take pride in our ability to efficiently and cost-effectively create a portfolio of lower and middle market credit investments. We believe the regulatory framework and restrictions on commercial banks has created a “capital vacuum” for lower and middle market companies and that as the broader economy cycles up and down, the"capital vacuum" will only widen and create greater market dislocation.
A Structural Change in Capital to the Middle Market
Fewer Financing Sourced in the Middle Market
Currently, there are roughly 3,200 fewer banks than there were in 1997. Commercial banks also have less than a 20% share of the middle market leveraged loan market. Regulatory changes will continue to make it costly for banks to hold middle market loans, resulting in further reduced bank competition. For more than 15 years, the trend of banks reducing their exposure to middle market lending has continued and we don't foresee that reversing in the near future.
Middle Market Loans Provide Better Risk Adjusted Returns
Attractive Returns with Conservative Capital Structures
Middle markets offer lower leverage and higher spreads for the lack of liquidity relative to the larger company markets. Superior risk adjusted returns are possible for disciplined investors through more diligence, increased covenant protections, higher rates, and the potential for equity.