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.
We believe falling supply and strong demand should spur stronger rent growth in the next year or two. Some areas will see strong rental gains faster than others.
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.
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