Fasanara has a front row seat to the evolving asset class of Fintech Lending and investing in the Digital Future. We’re constantly assimilating information, speaking with innovators, and developing our theses. Here’s a selection of important topics Fasanara has been discussing internally.
In this edition:
Financial institutions must get serious about Digital Ecosystems
Private credit may outperform public bonds as defaults rise
The ESG world is turning more to private investments
Credit's "Golden Moment"
Maker to spark ‘New explosion of DAI’ with custom lending market.
Financial institutions must get serious about Digital Ecosystems.
The next few years could be a make-or-break period for some banks. They will join the digital financial ecosystem movement—or be consumed by it.
These platform-based ecosystems offer products and services that are created and distributed in partnership with others. And they confer powerful advantages, allowing organizations to enter new markets, create new services, and acquire new customers faster and more affordably than with traditional product development and go-to-market models. By 2030, digital ecosystems could account for a significant share of the banking revenue pool.
Private credit may outperform public bonds as defaults rise.
The opportunities for private credit may be expanding even as financial markets grow more turbulent and uncertain, according to Goldman Sachs Asset Management (GSAM).
Higher quality borrowers that may otherwise have issued debt in the public markets are seeking financing in private markets, attracted by certainty and speed of completing these transactions, Stephanie Rader, GSAM Global Head of Private Credit Client Solutions, and James Gelfer, in Portfolio Solutions for Alternatives Capital Markets and Strategy, write in a report. As interest rates climb, these loans are pricing at wider spreads (relative to similar-maturity high-yield bonds or leveraged loans) and higher overall yields, and they have more conservative capital structures.
The ESG world is turning more to private investments.
For pension funds, endowments and family offices, there are more options beyond listed equities to make an impact.
Credit's "Golden Moment".
We see a “golden moment” today for private credit. Higher-for-longer interest rates, turbulence in the banking sector and resulting regulatory pressures are poised to weigh on the cost and availability of credit. Private lenders can play a critical role supporting businesses when others are constrained in this tighter environment.
Maker to spark ‘New explosion of DAI’ with custom lending market.
Maker DAO is synonymous with its DAI stablecoin, but the DAO has never directly supported front-end access to the offering. Instead, user-facing products have been the purview of third-parties such as Oasis, DeFi Saver and Instadapp.
That’s changing with the launch of Spark Protocol, which will give users access to a wholesale dai credit line directly injected from Maker.
