What Happens When Private Credit Loans Get in Trouble
Lenders in this hot asset class are able to flex a lot of muscle in restructurings. But there can be surprises along the way.
Illustration: Kate Prior for Bloomberg Markets
Alacrity Solutions found itself in a tough spot. The Indiana-based company helps property and auto insurers manage customer claims by taking calls, sending adjusters into the field and reviewing files. But a few clients made up much of its business, and last year it lost market share as some of them began to bring service in-house. It also saw a lull in claims filings because of changing weather patterns. And Alacrity owed a lot of money to private credit lenders—around $1.5 billion.
In January the company announced that it had to restructure. Lenders—including fund managers Antares Capital, Blue Owl Capital and KKR—took over ownership to salvage their investment. They’re hopeful for a turnaround, according to people familiar with the matter.