사모 크레딧: 변화하는 대출 환경 속에서 돋보이는 자산 기반 금융

2. U.S. consumer lending: Consumer lending outside of residential mortgages represents a sizable opportunity, with over $17 trillion in U.S. household debt including personal loans, student loans, and credit card receivables. Despite higher interest rates, household balance sheets remain strong, with debt-to-income ratios declining in recent years and net worth near all-time highs (see Figure 2). Debt servicing costs remain low by historical standards, largely because about 95% of American mortgages are fixed rate.

   While higher delinquencies are often seen as signs of U.S. consumer weakness, not all U.S. consumers have similar credit profiles. Delinquencies have risen significantly in the subprime segment; but those in the prime and near-prime categories have normalized to pre-COVID levels. Additionally, many lower-credit consumers experienced a temporary and artificial boost to their FICO scores due to pandemic-era student loan forbearance and fiscal stimulus, which has since led to increased delinquencies. PIMCO’s large, granular U.S. consumer credit database stretches back to 2005 and encompasses an estimated 35-40 billion anonymized data points, helping us understand consumer behavior through the cycle and pinpoint the most compelling loan pools.

3. Aviation finance: Capital needs continue to grow in this sector. Barriers to sourcing and servicing the underlying collateral remain high, while the collateral itself exhibits strong fundamentals. The aviation industry has faced substantial disruption from the pandemic and the Russia-Ukraine conflict. However, after taking on $250 billion in incremental debt, airlines returned to profitability in 2023 by focusing on cost-cutting and increasing fleet capacity to meet increasing travel demand, with revenue passenger kilometers (RPKs) surpassing pre-COVID levels. Production issues and a persistent backlog in aircraft manufacturing have limited the availability of new planes, with original equipment manufacturers delivering 35% fewer aircraft (4,200 planes) than ordered from 2019 to 2023 (see Figure 3). With this supply/demand imbalance growing, we believe lease rates on new and mid-life aircraft offer attractive yield and income potential (for more, watch “Aviation Finance: Capturing Opportunities in Private Credit”).

4. Data infrastructure: Demand for data centers has been surging – driven by increased connectivity, cloud computing adoption, large language models, and the rapid evolution of generative AI technologies (see Figure 4) – and the supply of capital is not keeping up. Companies need robust infrastructure, including both data centers and high-computational GPU chips, which require significant capital Banks have had a very limited footprint in these markets, specifically in lending to companies looking to buy new chips. We see numerous opportunities to develop bespoke financing solutions that can benefit from underlying collateral, including chips, network infrastructure, or contractual future cash flows derived from customer contracts.

Focus on relative value is paramount in private credit

As demand for capital outpaces supply across several sectors, investors stand to benefit from a diversified approach to private credit. Over cycles, we have regularly seen certain markets experience inflated pricing. At PIMCO, we consistently apply a relative value lens to aim to avoid value traps. We believe it is important to approach certain sectors with caution given significant capital formation or hidden risks that have yet to be tested. These are some of those areas:

1. Music royalties: An emerging sector within asset-based finance, music royalties are attracting interest due to their uncorrelated returns. However, we believe dedicated capital has generally left less value in this sector amid expanding multiples and astounding valuations for some high-profile deals. While music royalties offer strong recurring income, we remain selective, focusing on smaller catalogs with under-monetized assets. There are also opportunities to acquire catalogs from lesser-known industry participants (e.g., mixing engineers), which may provide similar cash flows at significant discounts.
2. Synthetic risk transfers (SRTs): For the past 15 years, banks have been frequent issuers of SRTs, mainly in Europe, to manage credit risk on their balance sheets. Until 2023, these trades were noticeably absent from the U.S., but the U.S. market has quickly evolved, with 2024 on track for record activity. With the influx of dedicated capital, valuations in the U.S. SRT market have tightened significantly. While SRTs provide an efficient way to access high-quality bank-originated credit, we do not consider them a standalone asset class. Instead, they represent one of many ways investors can gain exposure to the underlying collateral, such as residential and commercial real estate, consumer-related areas, and corporate assets. We see SRTs as an attractive means to access certain asset classes when whole loans are less accessible, trading at rich levels, or offer less scale. Our strategies will constantly shift between SRT and other formats as relative values evolve, or as strategic factors, like bank capitalization levels, affect pricing.
3. Newer consumer loan products: While we remain constructive on broader personal lending, we believe emerging, shorter-term products, including buy now pay later (BNPL) loans, are still maturing. BNPL loans allow customers to buy products and services without paying the full amount upfront, providing financial flexibility. However, we have limited insight into origination practices, as many active originators do not conduct thorough underwriting or share reporting with credit bureaus. Our approach to investing in consumer loans emphasizes granular underwriting, requiring extensive loan-level datasets to drive our analysis.

Balancing optimism with cautious evaluation

As a longstanding investor in asset-based finance, we are excited about the sector’s evolving opportunities. What was once a market dominated by banks is becoming a more diverse financing ecosystem that has historically included securitization markets and increasingly involves private lenders. This shift presents one of the most compelling opportunities for private credit allocators in over a decade.

However, this optimism must be tempered with discipline. Investors should be aware of the varying fundamentals and valuations across asset-based finance areas, particularly in sectors with uncertain collateral values or weak documentation that could undermine credit performance.

At PIMCO, we continue to take a relative-value-oriented approach to the array of opportunities generated by our origination platform. By leveraging our multi-decade head start in building datasets, as well as our analytics framework and macroeconomic insights, we strive to uphold rigorous discipline in underwriting and portfolio construction. The same principles that have driven our success in public and private markets will remain essential in navigating the future of asset-based finance.

Appendix: Asset-based finance requires harnessing relative value when sourcing across PIMCO’s multiple origination channels

Private lenders employ various approaches to origination in asset-based finance. Some focus on specific sectors, some emphasize captive sourcing through ownership of origination platforms, while others take a more opportunistic approach across secondary markets.

PIMCO’s origination strategy leverages the power of our platform to source opportunities across all sectors, deal structures, and channels. In practice, we believe that successful investing in this asset class prioritizes relative value, which requires navigating both bank and non-bank origination channels. This approach allows us to capitalize on bank portfolio sales, forward flow partnerships, and highly structured risk transfer transactions.

We can source deals across all the collateral types we’ve outlined and with a variety of risk profiles depending on the health of the collateral and the structure of the transaction. While owning an origination platform can be the optimal sourcing strategy for certain asset types, it isn’t universally applicable. For example, since the GFC, we believe residential mortgage credit markets have graduated beyond a captive origination model. Conversely, in sectors such as aviation finance, we consider captive origination critical to access various financing products across loans and leases. We look to apply a uniform approach to any sector in which we invest.  We systematically compare the various potential origination channels by assessing potential origination partners across product quality, the scalability and durability of the opportunity set, and potential alternative ways to source risk

We believe the power of PIMCO's platform provides investors with access to opportunities across the asset-based finance spectrum, focusing on relative value and a strong alignment of incentives with our investors.

For more information on PIMCO’s alternatives solutions, visit pimco.com/alternatives.