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Video: How the Private Market Has Responded During Times of Capital Market Volatility

Pricoa Private Capital's Brian Thomas, Dianna Carr and Michael Campion describe how the private placement market responds to businesses during times of capital market volatility.

The private placement market is often seen as more stable than the public debt markets, and is “open for business” at times when the broader public debt and financial markets are “closed,” particularly during periods of crisis.

The capital companies can access from the private placement market is on a negotiated basis, sourced outside of traditional public issuances or bank market funding. The private placement market is largely comprised of insurance companies, pension plans and other institutional investors.

Private placement providers differ from banks in that the capital they have to deploy is traditionally more stable than the capital the bank market relies upon; reason being that insurance companies and pension plans are not materially exposed to the same short-term liquidity risk. This was most acutely demonstrated during the 2008-2009 financial crisis, as many private placement lenders continued to provide capital, while many banks limited their lending availability to preserve corporate liquidity.

In general, the private placement market consistently demonstrates its ability to remain open during a crisis and finds a way to fund the capital needs of companies during periods when the public debt markets and/or the bank market may not be accessible. Thus, the private placement market is typically characterised as being patient and long-term focused, it does not react rashly to short-term, temporary dislocations in market appetite.

“Most private market investors really view providing capital to their companies as a partnership, and so in times of trouble or volatility or the company becomes very challenged, that's really where the investor can show their true colors; really take the approach of ‘We're going to weather the storm together,’ and both come out successful on the other end.” - Michael Campion, Vice President, Newark

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Brian Thomas

Brian Thomas is the Managing Director of Pricoa Private Capital's Energy Finance Group: Oil & Gas and oversees the private placement activity in Pricoa's oil, gas and related energy investment activities worldwide. He joined Pricoa in 1995.

Thomas received a BBA and an MBA from the University of Texas at Austin.

Dianna Carr

Dianna Carr is a Managing Director in Corporate Finance for Pricoa Private Capital, located in Chicago. She leads a team responsible for marketing, originating and managing private placement and mezzanine investments in Michigan and Wisconsin. She joined Pricoa in 2000.

Dianna received a BA from Michigan State University and an MBA from Northwestern University's Kellogg School of Management.

Michael Campion

Mike Campion is a Senior Vice President in Institutional Asset Management for Pricoa Private Capital, located in Newark. He is assistant portfolio manager for Pricoa’s affiliated and non-affiliated accounts, including primary responsibility for the Gibraltar and POJ sub-advisory portfolios. Mike is also responsible for overseeing new deal allocations, performance related analysis and various analytical portfolio management functions. Mike joined Pricoa in 1997. Prior to transferring to Pricoa Private Capital in 2003, he worked in PGIM Investment Operations supporting Pricoa.

Mike received a BS from Lehigh University and an MBA from Rutgers University.

This document does not take into account individual circumstances, objectives or needs, nor is it intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services.  This document does not constitute investment advice and should not be used solely as the basis for any investment decision.
This article represents the views, opinions and recommendations of the author(s) regarding the economic conditions, asset classes, securities, issuers or financial instruments referenced herein. Distribution of this information to any person other than the person to whom it was originally delivered is unauthorised, and any reproduction of these materials, in whole or in part, or the divulgence of any of the contents hereof, without prior consent of Pricoa Private Capital is prohibited. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice. Pricoa Private Capital has no obligation to update any or all of such information; nor do we make any express or implied warranties or representations as to the completeness or accuracy or accept responsibility for errors. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services and should not be used as the basis for any investment decision. Past performance is no guarantee or reliable indicator of future results. No liability whatsoever is accepted for any loss (whether direct, indirect, or consequential) that may arise from any use of the information contained in or derived from this report. Pricoa Private Capital and its affiliates may make investment decisions that are inconsistent with the recommendations or views expressed herein, including for proprietary accounts of Pricoa Private Capital or its affiliates.
The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies to particular clients or prospects. No determination has been made regarding the suitability of any securities, financial instruments or strategies for particular clients or prospects. For any securities or financial instruments mentioned herein, the recipient(s) of this report must make its own independent decisions.

Pricoa Private Capital (‘PPC’) is a trading name of PGIM, Inc. (‘PGIM’), the principal asset management business of Prudential Financial, Inc. ('PFI'), and it is also a trading name of PGIM Private Capital Limited and PGIM Private Capital (Ireland) Limited. In the United Kingdom, information is issued by PGIM Private Capital Limited with registered office: Grand Buildings, 1-3 Strand, Trafalgar Square, London, WC2N 5HR. PGIM Private Capital Limited is authorised and regulated by the Financial Conduct Authority (“FCA”) of the United Kingdom (Firm Reference Number 172071) and registered in England No. 1331817. In the European Economic Area (“EEA”), information is issued by PGIM Private Capital (Ireland) Limited with registered office: Pramerica Drive, Letterkenny Business and Technology Park, Letterkenny, Co Donegal, F92 W8CY, Ireland. PGIM Private Capital (Ireland) Limited is authorised and regulated by the Central Bank of Ireland and registered in Ireland under company number 635793 operating on the basis of a European passport. In certain EEA countries, information is, where permitted, presented by PGIM Private Capital Limited in reliance of provisions, exemptions or licenses available to PGIM Private Capital Limited under temporary permission arrangements following the exit of the United Kingdom from the European Union. These materials are issued by PGIM Private Capital Limited and/or PGIM Private Capital (Ireland) Limited to persons who are professional clients as defined  under the rules of the FCA and/or to persons who are professional clients as defined in the relevant local implementation of Directive 2014/65/EU (MiFID II).