In a recent ION Influencers fireside chat, Christophe Carrasco, Head of Private Assets at BNP Paribas Asset Management (BNPP AM), shared his insights on the evolving landscape of private credit. Hosted by Giovanni Amodeo, the discussion covered a range of topics from market cycles to the future of private credit and the role of banks.

Key Topics Discussed:

Christophe Carrasco’s Background and Role: Christophe Carrasco leads the corporate private debt division at BNPP AM, having joined the firm in 2017. Under his leadership, the division has raised €2 billion and deployed €1.7 billion across 250 companies in Europe.

Evolution of Private Credit: Carrasco highlighted the various market cycles over the past 15-20 years, including the 2008 financial crisis and the COVID-19 pandemic. He emphasized the importance of companies’ ability to pass costs onto customers to survive economic downturns.

Changing Role of Banks: Banks have faced increased regulatory constraints since the 2008 crisis, affecting their ability to provide long-term financing. Private credit has emerged as a crucial alternative, offering flexible, long-term financial solutions that banks often cannot provide.

Development of BNP Paribas’ Private Credit Business: Carrasco discussed the milestones in setting up the private credit business at BNPP AM, including the initial resistance from BNP Paribas’ banking division. The firm now offers a comprehensive range of financing options, including unitranche and junior debt, positioning itself as a one-stop-shop for financing needs.

Branding and Market Positioning: Despite potential confusion between BNP Paribas’ banking and asset management arms, Carrasco stressed the importance of leveraging the BNP brand. BNPP AM maintains a separate investment process, ensuring independence in decision-making.

Partnerships Between Private Credit Providers and Banks: Carrasco noted a growing trend of partnerships between private credit funds and banks, combining their strengths to offer comprehensive financing solutions. Such collaborations are increasingly necessary to meet the diverse needs of companies and private equity funds.

Origination and Risk Management: BNPP AM leverages BNP Paribas’ strong origination capacity while maintaining diversification to manage risk. The firm emphasizes the importance of thorough due diligence and cross-checking information to ensure reliable investment decisions.

Talent and Technological Advancements: Carrasco highlighted the need for curious and diligent professionals who can leverage new technologies like AI to enhance productivity. He reassured that both junior and senior roles remain essential, despite technological advancements.

Future Trends in Private Credit: Flexible financing products tailored to specific business needs will continue to grow. The trend towards offering a one-stop-shop for financing solutions is expected to strengthen.

Market Outlook and Consolidation: Carrasco predicted a steady increase in M&A activity, driven by the need for consolidation in various industries. He also discussed the ongoing consolidation within asset management, driven by the need for economies of scale.

Conclusion: Christophe Carrasco’s insights provide a comprehensive overview of the current trends and future directions in private credit. His experience and strategic vision highlight the evolving role of private credit in supporting business growth and innovation.

Key Timestamps:

00:08 Introduction to Private Credit Trends
01:28 Evolution of Private Credit
02:31 The Role of Banks in Private Credit
04:48 Establishing Private Credit at BNP
07:09 Branding and Positioning in Asset Management
10:03 Future Partnerships Between Private Credit Providers and Banks
11:43 Origination Strategies and Future Outlook
15:42 Talent Acquisition in Private Credit
17:58 Future Products in Private Credit
19:11 Market Trends and M&A Outlook
21:31 Consolidation Trends in Asset Management
22:45 Conclusion and Closing Remarks