Carlyle executives share their views and expertise on a range of investment, public policy and economic matters through podcasts, commentaries, policy papers, TV interviews, speeches and presentations.

Credit in Downturns

As observed most recently in the fourth quarter of 2018, credit (speculative grade loans and bonds) often declines in value during periods of market stress as though it sits pari passu with equity rather than senior to it in the capital structure. As we document in this paper, during the 2008-09 and 2015-16 (energy) market dislocations, creditors earned average total returns of 80% in the six-to-nine months following the market bottom, despite also enjoying a degree of implicit subordination…

As observed most recently in the fourth quarter of 2018, credit (speculative grade loans and bonds) often declines in value during periods of market stress as though it sits pari passu…

As observed most recently in the fourth quarter of 2018, credit (speculative grade loans and bonds) often declines…

The Liquidity Risk Premium in Corporate Credit

In their new paper, Mark Jenkins and Jason Thomas find that middle-market loans have historically yielded one-third (170bp per year) more than large, bank-syndicated loans due largely to their illiquidity. Consequently, study results suggest that investors with the ability to hold loans to maturity can boost returns by increasing exposure to liquidity risk.

In their new paper, Mark Jenkins and Jason Thomas find that middle-market loans have historically yielded one-third (170bp per year) more than large, bank-syndicated loans due largely to…

In their new paper, Mark Jenkins and Jason Thomas find that middle-market loans have historically yielded one-third…

Economic Outlook
Powell Fed Will Ensure Cash Does Not Become King

The era of accommodative monetary policy is over. The Fed is moving to neutral as fast as the economy can tolerate, but the fed funds rate at the end of this process may be much closer to current levels than many suppose.  If a late-cycle investment boom (and corresponding price pressures) does not materialize in 2019, neither should the three-to-four Fed rate hikes many investors now fear.

The era of accommodative monetary policy is over. The Fed is moving to neutral as fast as the economy can tolerate, but the fed funds rate at the end of this process may be much closer…

The era of accommodative monetary policy is over. The Fed is moving to neutral as fast as the economy can tolerate,…

MARKET COMMENTARY
Oil Market Outlook: Getting Ahead of the Narrative

Despite sizeable increases in crude prices (+50%) and energy industry earnings (+300%) over the past year, capital markets remain skeptical of the industry’s medium-term fundamentals. Brent five-year futures are priced at a 15% discount to spot and energy sector valuations imply little upside for industry earnings. As we argue in our latest Market Commentary paper, capital markets’ skepticism seems founded on a tripartite narrative that doesn’t hold up under close scrutiny. Thanks to…

Despite sizeable increases in crude prices (+50%) and energy industry earnings (+300%) over the past year, capital markets remain skeptical of the industry’s medium-term fundamentals. …

Despite sizeable increases in crude prices (+50%) and energy industry earnings (+300%) over the past year, capital…