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A Blackstone Inc. fund further cut the value of a private credit loan for Thoma Bravo-backed software company Medallia Inc., revealing growing stress for its single largest investment.
A fund jointly run by KKR & Co. and Future Standard, formerly known as FS Investments, has also marked down the debt, valuing it at around 91 cents on the dollar as of the end of June, compared to around 95 cents the prior quarter, according to a separate filing.A fund managed by Onex Corp., another lender to the company, said that Medallia, along with two other companies, accounted for 64% of gross unrealized losses during the second quarter, its filings show. Representatives for Blackstone and KKR declined to comment on the markdowns, while Thoma Bravo and Onex didn’t respond to requests for comment. Blackstone led a $1.8 billion debt package for Medallia in 2021, which supported Thoma Bravo’s investment in the company.But, for private credit, there’s often a lag between an asset’s current performance and its valuation on paper, given many private credit funds only have to make disclosures to their investors on a quarterly basis. Last year, Veritas Capital attempted to reduce its exposure to the software business and was looking to trade out of the loan, Bloomberg News previously reported. Medallia hired Mark Bishof as its new chairman and CEO in January, following the exit of Joe Tyrrell in 2024, who had spent about a year in the role. The debt charges interest at 6.5 percentage points over the base rate, with 4 percentage points paid in kind, the filings show.Payment-in-kind features allow the borrower to defer paying interest in cash, often until the debt matures. The deal was structured as a so-called recurring-revenue loan, a financing avenue typically used by software companies that are still burning through cash to fund their expansion.
What is Debt Funds? Know everything about debt mutual funds, types of debt funds, benefits, taxation & list of top performing funds to generate better returns than FD.
Sources of Returns: A debt fund earns in two ways. First, interest payments from its bond holdings generate coupon or accrual income. Second, when interest rates change, bond prices move in the opposite direction, resulting in capital gains or losses on the fund portfolio.When market yields fall, bond prices increase, and the value of the fund goes up. The capital gain/loss component is also called the mark-to-market (MTM) return. How much a debt fund earns through interest and how much through capital gains depends on the type of bonds held by it.So, funds that hold more long-term bonds are more likely to make capital gains or losses. In market jargon, we say that funds with higher duration carry a higher mark-to-market (MTM) or interest rate risk. Debt funds that are mainly invested in short-term bonds show limited capital gains and losses.Such funds can increase yields by holding lower-rated bonds. That is because bonds with a lower credit rating, which are more likely to default, have to pay higher coupon rates as compared to bonds with a better rating. Strategies to Manage Returns Debt funds manage returns by varying the maturity profile or credit rating of their bond portfolios.
Blackstone Private Debt Fund's Medallia Markdown: A Catalyst for Rebalancing and Enhanced Returns in Private Credit Portfolios
The recent markdown of Blackstone Private Debt Fund's loan to Medallia—a once-celebrated software company with a recurring-revenue model—has sparked a critical conversation about risk-adjusted return dynamics in private credit portfolios. This case study, while seemingly isolated, reveals systemic shifts in investor behavior, underwriting discipline, and macroeconomic resilience.This 5-point decline, though modest in absolute terms, signals a recalibration of risk perceptions. The loan's valuation erosion contrasts with the broader health of Blackstone's credit funds, where non-accruals remain low (0.3% at cost) and stressed debt is well-contained.Blackstone's Secured Lending Fund (BXSL), for instance, has emphasized larger, higher-EBITDA borrowers, reflecting a defensive stance. While this approach may sacrifice some yield, it enhances risk-adjusted returns by mitigating exposure to volatile sectors or overleveraged borrowers. The Medallia case offers three strategic insights for private credit investors: Rebalance Toward Senior Secured Debt: With 97% of Blackstone's credit portfolio already in senior secured debt (average LTV of 43%), the fund's structure inherently limits downside risk.- Investors are rebalancing portfolios toward senior secured debt and liquidity buffers, prioritizing risk-adjusted returns over yield in volatile markets. - Divergent lender valuations (87-98) expose private credit pricing opacity, prompting calls for dynamic underwriting and granular transparency in fund reporting.
... BlackRock Debt Strategies Fund, Inc.’s (DSU) (the 'Fund') primary investment objective is to provide current income by investing primarily in a diversified portfolio of US companies’ debt instruments, including corporate loans, which are rated in the lower rating categories of the ...
BlackRock acquires ElmTree Funds, scaling range of income investment solutions for our clients. Read more. Filter list by keyword Show More Show Less to of Total Sorry, no data available. ... You can trade this ETF now. ... BlackRock Debt Strategies Fund, Inc.’s (DSU) (the 'Fund') primary investment objective is to provide current income by investing primarily in a diversified portfolio of US companies’ debt instruments, including corporate loans, which are rated in the lower rating categories of the established rating services (BBB or lower by S&P’s or Baa or lower by Moody’s) or unrated debt instruments, which are in the judgment of the investment adviser of equivalent quality.Non-investment-grade debt securities (high-yield/junk bonds) may be subject to greater market fluctuations, risk of default or loss of income and principal than higher rated securities. Investments in emerging markets may be considered speculative and are more likely to experience hyperinflation and currency devaluations, which adversely affect returns. In addition, many emerging securities markets have lower trading volumes and less liquidity. The fund may use derivatives to hedge its investments or to seek to enhance returns.Overall Morningstar Rating for Debt Strategies Fund, as of Jan 31, 2024 rated against 22 Bank Loan Funds based on risk adjusted total return.Corporate loans include senior and subordinated corporate loans, both secured and unsecured. The Fund may invest directly in such securities or synthetically through the use of derivatives. No assurance can be given that the Fund's investment objective will be achieved.
Private investors are the biggest holders of national debt – $24.4 trillion as of March 2025 – followed by federal trust funds and retirement programs.
The U.S. has had public debt for longer than it’s been a country, but it managed to get along without a debt limit for more than a century and a half. The standard practice was for Congress to authorize specific bond issues for specific purposes – $11.25 million to fund the Louisiana Purchase, $500 million to finance the Civil War, $130 million to build the Panama Canal, and so forth.Investors own about two-thirds of the national debt, or $24.4 trillion as of March 2025, the latest figures available. The rest is held in various federal trust funds and retirement programs ($7.3 trillion, or 20.1%) or by the Federal Reserve System ($4.6 trillion, or 12.6%).Social Security’s two trust funds (one for retirement benefits, one for disability insurance) together held nearly $2.7 trillion in special Treasury securities as of July 2025. Various military retirement funds held more than $2.2 trillion. And Medicare’s two trust funds held a combined $425.3 billion. Because of data lags, we have to go back to December 2024 for a closer look at the private investors who hold the national debt.Mutual funds held nearly $4.5 trillion, or 12.4%. Banks and similar institutions held nearly $1.9 trillion, or 5.1%, while states and localities owned almost $1.7 trillion, or 4.6%. Public and private pension funds together held $955.7 billion in U.S. debt, or 2.6%. The rest was held by a mix of individuals, businesses, insurance companies, broker-dealers and others.
A debt fund is a Mutual Fund scheme that invests in fixed income instruments, such as Corporate and Government Bonds, corporate debt securities, and money market instruments etc. that offer capital appreciation.
A debt fund is a Mutual Fund scheme that invests in fixed income instruments, such as Corporate and Government Bonds, corporate debt securities, and money market instruments etc. that offer capital appreciation.If you have been saving in traditional fixed income products like Bank Deposits, and looking for steady returns with low volatility, debt Mutual Funds could be a better option, as they help you achieve your financial goals in a more tax efficient manner and therefore earn better returns.Debt funds are also referred to as Fixed Income Funds or Bond Funds.A few major advantages of investing in debt funds are low cost structure, relatively stable returns, relatively high liquidity and reasonable safety.
Learn how private debt funds work and the role of debt asset management. Get expert insights from Alter Domus on navigating this growing investment avenue.
In this guide, we’ll tell you everything you need to know about private debt funds including how they operate, how they are structured, and some of the key strategies they employ to manage risk and generate value for investors.Private debt, also known as private credit, refers to the provision of debt financing to borrowers through channels other than traditional banking institutions or public markets. So rather than securing loans from banks or issuing publicly-traded bonds, businesses borrow the funds needed to support growth, refinance existing debt or fund acquisitions and current operations from private lenders.These are pooled investment vehicles that gather capital from a range of investors, including institutional investors (such as pension funds, insurance companies, and endowments) and high-net-worth individuals. The fund then strategically deploys this pooled capital to provide diverse forms of debt financing to companies.This enhanced control allows them to better manage credit risk and tailor each investment to specifically meet the fund’s desired risk-return profile. Private debt funds come in various forms.
Utilizing municipal bonds and other types of debt (including bank loans and lines of credit) to fund public infrastructure is a valuable strategy for Governments to spread the cost of significant long-term assets over their useful life.
Debt service payments as a percentage of general fund revenues or expenditures.It is important to involve all stakeholders in the decision to issue debt and to make sure resources are identified to prepare for the issuance of debt and to address on-going requirements throughout its term.Various GFOA Best Practices provide a comprehensive overview of the requirements associated with a the incurrence of debt, but it is also recommended that any government or authority considering entering into a debt obligation consult the expertise of bond counsel, disclosure counsel, and a municipal advisor to determine the best course of action for their specific project and to assist with the development of debt management policies.Debt management policies are written guidelines, allowances, and requirements that guide the process of debt evaluation and debt issuance practices of Governments, including the issuance process, management of a debt portfolio, adherence to various laws and regulations, federal tax compliance, and compliance with post-issuance continuing disclosure requirements.
Debt Mutual Funds invest in bonds, government securities, and corporate debt for stable income. Learn their types, risks, returns, and how to start investing.
Debt funds means a type of mutual fund that invests your money in safer options such as government bonds, company deposits, and treasury bills. Debt funds lend your money to companies or the government, and you earn interest from it.It is important to know that these funds are less risky than stock market investments, so they are an ideal choice if you want steady and safer returns. Debt funds in mutual funds also offer better returns than a Savings Account, and you can take your money out whenever you need it, just like regular mutual funds.These funds offer an opportunity for investors to earn stable returns with lower risk compared to equity investments. Debt funds, a type of mutual fund, pool money from multiple investors and are managed by professional fund managers who make investment decisions on behalf of the investors.The features of these funds are:- For investors seeking profits, Debt Funds are the ideal choice due to their minimal risk profile.
A debt fund is an investment pool, such as a mutual fund or exchange-traded fund, in which the core holdings comprise fixed income investments. A debt fund may invest in short-term or long-term bonds, securitized products, money market instruments or floating rate debt.
A debt fund is an investment pool, such as a mutual fund or exchange-traded fund, in which the core holdings comprise fixed income investments. A debt fund may invest in short-term or long-term bonds, securitized products, money market instruments or floating rate debt.The iShares U.S. Treasury Bond ETF (GOVT) is a passively managed index replication fund that tracks the ICE U.S. Treasury Core Bond Index. It has a net expense ratio of 0.05%, and its 5-year average annual return through Aug. 4, 2022, is 0.61%. ... The debt fund market also includes a wide range of active managers, who seek to outperform debt fund indexes such as the Bloomberg U.S.The First Trust Tactical High Yield ETF (HYLS) is an example of an actively-managed debt fund that invests for income and capital appreciation. Its 5-year NAV return as of Aug. 4, 2022, is 0.89%. While the fund is not outperforming its selected index year-to-date, it is one of the top-performing funds in the U.S.Overall, investors in debt funds should understand the return calculation measurements that are used as performance indicators. Since debt funds involve income generation, funds may pay scheduled monthly or quarterly dividends.
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Mizuho Financial Group Inc. raised ¥14.3 billion ($97 million) for its latest startup fund, as Japanese banks delve deeper into arranging credit for new ventures.
The Tokyo-based lender said in a statement Wednesday that the fund, co-managed with payments startup Upsider Inc., closed with investment from seven Japanese financial institutions including Sumitomo Mitsui Trust Bank Ltd.
The J.P. Morgan Emerging Markets Bond Index Global Diversified tracks total returns for U.S. dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities that meet specific liquidity and structural requirements.
Returns or yields for the fund would have been lower if .08% of the fund's management fee had not been waived. The advisor expects this waiver to continue until July 31, 2026, and cannot terminate it prior to such date without the approval of the Board of Trustees.The gross expense ratio is the fund's total annual operating costs, expressed as a percentage of the fund's average net assets for a given time period. It is gross of any fee waivers or expense reimbursement. The net expense ratio is the expense ratio after the application of any waivers or reimbursement.The lower rated securities in which the fund invests are subject to greater credit risk, default risk and liquidity risk.Generally, as interest rates rise, the value of the bonds held in the fund will decline.
Debt Mutual Funds - Debt are the major markets in which people invest their hard-earned money to make profits. To know more about latest debt fund schemes, NAV, returns, performance at Groww.in and start invest in direct mutual funds.
These funds are also suitable for short-term investors and medium-term investors. Debt mutual funds offer lower returns than equity funds. Also, there is no guarantee of the returns. The NAV of such funds fluctuates with changes in the interest rate.If the interest rates rise, then the NAV of these funds falls and vice-versa. Debts funds fundamentally carry three types of risks:Liquidity Risk - which is the risk carried by the fund house of not having adequate liquidity to meet redemption requests. Based on the maturity period, debt funds can be classified into the following types:You can invest in debt funds directly through AMC, or you can opt to invest via Groww. You just have to download the Groww application from the Play Store or Appstore and complete the registration and KYC process to invest. The main reasons that drive investment in debt funds are:
Top European private debt fund firm executives believe their sector is ripe for merger and acquisition activity, according to an industry poll published this week.
Private debt funds, also called loan funds, lend money directly to companies, particularly small and medium-sized enterprises.The vast majority of European private debt fund leaders (96%) told Carne’s pollsters they expected new capital inflows would be slightly higher or about the same this year compared to 2024.“Nearly all (96%) private debt managers surveyed agree that their sector will experience consolidation over the next five years with nearly three-quarters (72%) saying this will be significant,” Carne Group, a fund management company, said in a report released on Thursday.“Fund managers say the number of private debt funds is set to grow in 2025, with almost half (48%) saying the number on offer will be dramatically bigger by the end of the year,” the report noted.
Peruvian power producer Kallpa Generacion SA said on Tuesday it has raised USD 700 million (EUR 597.2m) in an international bond sale to refinance existing debt and complete financing for its Sunny solar project in the city of Arequipa.
Fund managers advise investors to consider shifting from long-term to shorter-term bond funds. This comes after strong gains in long-term debt funds. The Reserve Bank of India is expected to pause rate cuts. Experts suggest focusing on accrual-based strategies.
Investors in bond mutual funds must lower their return expectations given the limited room for interest rate cuts. Mumbai: Investors, who made strong gains from long-term debt funds over the past year can consider booking profits and shift to shorter-term bond funds, say fund managers.Bond prices and interest rates move in opposite directions. When interest rates fall, bond prices rise, generating capital gains for investors in long-duration debt funds. The recent rise in bond prices (and fall in bond yields), ahead of the 50-basis point rate cut by the RBI, triggered such gains.This is why fund managers, like Banthia, say returns from debt funds will likely come from accruals--the regular interest earned on bonds-rather than from bond prices rising further.Sinha suggests investors could buy floating rate funds, that invest in debt securities with interest rates that adjust periodically based on a benchmark, such as the RBI repo rate.
You might look at the dozens of debt fund names out there and feel a bit lost. It can seem like a long menu at a restaurant you've never been to. But what if I told you that picking the right type of fund comes down to answering just two
How comfortable do I feel with who the fund lends my money to? (The TRUST question) That’s it. Almost every debt fund category is just a different combination of answers to these two questions.Mutual Fund investments are subject to market risks, read all scheme related documents carefully. ... So far, we have covered a lot of ground together. We learned that debt funds are about lending. We learned how to choose a fund based on your TIME and TRUST questions.When you look at a fund, how can you quickly know how · Today, we're going to talk about something called a "Debt Fund." We know, we know... the word "debt" usually makes us think of credit card bills and loans, things we owe someone else.The most common way to separate debt funds is by the time the fund lends your money for.
Over the last 18 months significant capital has been raised, outside of the retail market, for what can broadly be described as ‘debt funds’. This description, while a convenient shorthand, conceals a great variety of products. An investor seeking exposure to this asset class can choose ...
Over the last 18 months significant capital has been raised, outside of the retail market, for what can broadly be described as ‘debt funds’. This description, while a convenient shorthand, conceals a great variety of products. An investor seeking exposure to this asset class can choose from an array of sponsors to access direct lending, […]An investor seeking exposure to this asset class can choose from an array of sponsors to access direct lending, leveraged loans and high-yield bonds, mezzanine debt, distressed debt, as well as numerous real estate and infrastructure strategies. From a structuring perspective, the result of this diversity is that there is no single fund design that can be utilised across the range of debt products.This, in our view, means that fund design has perhaps a greater role to play in developing a structure that is attractive to investors than in other asset classes where there is a dominant structure well known to, and accepted by, the market. The aim of this article is to highlight some of the key issues that asset managers will need to consider when determining fund design for a debt product and to look at how they have been addressed in recent fund launches.However, debt products do present some structuring challenges that seem to be bespoke to this asset class. Among the most important of these are: 1. The liquidity of the investment asset. 2. The nature of the investment return (yield versus capital appreciation or both). 3. The importance of offshore investment platform structuring. 4. The UK tax status of the fund’s activity.
Domestic Holders: Roughly two-thirds of this debt is owned domestically, including private investors, mutual funds (holding nearly $4.5 trillion), banks ($1.9 trillion), public and private pension funds ($956 billion), and state and local governments ($1.7 trillion).
This portion represents debt the government essentially owes to itself. As of December 2023, this was about $12.1 trillion. This debt arises when government-administered trust funds collect more revenue than needed to pay out in a given year.The concept of intragovernmental debt can be confusing. It represents a real legal obligation to pay future benefits to retirees, veterans, and Medicare recipients. However, the cash from those trust fund surpluses has already been borrowed by the Treasury and used to fund general government operations.The “trust fund” is not a locked box of cash but a collection of IOUs the government must honor through future fiscal actions. The current state of U.S. debt is not the result of a single event or policy but the culmination of decades of decisions, crises, and evolving demographic and economic trends.These taxes are levied on wages and specifically dedicated to funding Social Security and Medicare trust funds. Corporate Income Taxes: Taxes on corporate profits provide around 10% of revenue. Other Sources: The remaining revenue comes from excise taxes (on goods like gasoline and tobacco), estate and gift taxes, customs duties on imports, and miscellaneous fees and receipts. ... Addressing the nation’s long-term fiscal imbalance requires difficult choices. No single, easy solution exists. Any comprehensive plan to put the debt on a sustainable path will likely need some combination of increasing federal revenues, reducing federal spending, and promoting stronger economic growth.
The owner of Global Loan Agency Services (GLAS) is exploring selling its stake in the debt administration services firm, three people familiar with the matter told Reuters, which would be the latest deal in a sector that is attracting billions of pounds from investors.
Cinven last year also acquired a majority stake in the fund administrator Alter Domus from Permira, in a 4.9 billion euro ($5.74 billion) deal. Potential buyers for GLAS include private equity firms attracted by the sector's predictable revenue and income streams, one of the people said. Founded in 2011, GLAS provides administration services specifically for the debt market, covering private credit, leveraged finance, capital markets and bankruptcy.LONDON, Sept 4 (Reuters) - The owner of Global Loan Agency Services (GLAS) is exploring selling its stake in the debt administration services firm, three people familiar with the matter told Reuters, which would be the latest deal in a sector that is attracting billions of pounds from investors.GLAS would mark the latest in a series of deal activity in the fund administration space following companies such as the potential sale of Astorg’s fund services business IQEQ and London-listed JTC, which last week rejected two takeover proposals from British private equity firm Permira.