TED
Once you're in a loan company and sponsor, you think about two different scenarios. One is everything's going fine. Maybe you must monitor it. Yep. And the other is something's not going well.
And I'd love to get a better understanding of what you're doing in each of those two scenarios.
RON
Sure, sure. So, one of the nice things about the middle market is you can you have tremendous transparency in terms of performance. And what I mean by that, in almost every deal we get monthly reporting, we get quarterly reporting because we have covenants, we get compliance certificates, we get annual budgets.
Because these are small deals, we know the management team, we know the sponsor. And so, every month our analysts take those monthly numbers, and they spread them. So, it starts right there. If anything sort of doesn't seem right, they'll raise it to the deal captain. We'll look at it and, you know, usually it's nothing.
But if there's something we don't understand, we'll pick up the phone call the sponsor, call the CEO. On a quarterly basis, we take the whole team off site for a day, and we do a fulsome quarterly review of the entire portfolio. Then, post that we sit with the investment committee, and we walk them through any names that we think need to be highlighted for them.
There's a fairly extensive rating system we go through, all of which to say, it is rare, if ever, that we're going to be caught off guard or surprised by something really bad because we should know if something's going wrong, if there's a trend, we should see it coming real early and we should be on top of it and we should be aware of it.
So that sort of first line of defense. Now look, if something goes wrong, you need to have restructuring capability and resources or you're going to find yourselves in trouble. And I think for us and again, perhaps another, I think real attraction for me in the Invesco platform and so on my team, we have workout resources.
One of my partners ran restructuring during the GFC at the bank he was working at, and so on. Any day we do, we immediately drop him in, and he becomes captain if we have a problem and a credit. But I think more important than that across our private credit platform, we have significant resources.
We have a distressed team that does nothing all day, but focus on challenge credits, loan to own. There's a wealth of resources at our disposal such that if we find ourselves in a situation, a problem which touchwood has been very rare for us. But if we do and you never know when you're going to, you want to make sure you've got proper resources available to be able to address it.
Ron Kantowitz talk about Invesco’s strategy to take a conservative approach to middle market direct lending, prioritizing capital preservation through disciplined structures and deep sponsor relationships with Capital Allocators podcast. By focusing on senior secured loans to stable, private equity-backed companies, our team has built a resilient platform that thrives on partnership, rigorous risk management, and data-driven oversight.
Invesco targets senior secured, first-lien unitranche loans with full collateralization and strong covenants, lending only to private equity-sponsored middle market companies with stable, predictable cash flows.
Our team leverages Invesco’s broad platform, emphasizing partnership, flexibility, and fair treatment — especially when navigating challenges or covenant breaches.
Middle market lending is “clubby” and collaborative, with lenders often partnering on deals and competing on expertise and service rather than aggressive pricing.
Listen to the full podcast interview here.
Invesco navigates today’s uncertain environment by remaining highly selective focusing on capital preservation, risk management underpin our direct lending approach.
This short video explains Invesco’s strategy to pursue optimal outcomes for direct lending investors by focusing on the middle market.
Explore the evolution of direct lending and the key differences between private equity-sponsored and non-sponsored deals, including risk and returns.
NA4719007
Capital Allocators and Invesco are not in any way affiliated.
This information is intended for Institutional Investors that are US residents.
Investment risks
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Alternative investment products may involve a high degree of risk, may engage in leveraging and other speculative investment practices that may
increase the risk of investment loss, can be highly illiquid, may not be required to provide periodic pricing or valuation information to investors, may
involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as mutual funds, often charge higher fees which may offset any trading profits, and in many cases the underlying investments are not transparent and are known only to the investment manager.
Important information
Information is provided as at June 9, 2025 and sourced from Invesco Private Credit unless otherwise stated.
This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. Views and opinions are based on current market conditions and are subject to change.
This link takes you to a site not affiliated with Invesco. The site is for informational purposes only. Invesco does not guarantee nor take any responsibility for any of the content.
