Blackstone Inc BX Blackstone Credit's global head of technology investing, Viral Patel, acknowledged the attractiveness of private credit to bridge the gap for tech firms amidst a sluggish IPO market and steady appetite for growth capital.
Patel discussed valuations, long-term tailwinds, and defensive investments with Bloomberg's Ellen Schneider.
Patel endorsed that take-private activity remains active in the pipeline, with muted sponsor-to-sponsor activity due to bid-ask spreads.
He also addressed the challenges for tech companies, including access to capital, macroeconomic uncertainty, and balancing growth with profitability.
Private credit is a good solution for mature late-stage tech companies, offering confidentiality, efficiency, and certainty of execution, Patel agreed.
Patel disclosed Blackstone's focus on cash flow-based loans and the shift from ARR loans to EBITDA-based loans for companies reducing top-line growth.
His outlook on IPOs is positive, with a healthy backlog of businesses waiting to go public once the market opens up.
Patel shared their love for cybersecurity as a highly defensive sector and software companies catering to corporations' increasing data volume.
Blackstone avoided lower-quality tech businesses with slower growth and poor unit economics.
Price Action: BX shares traded higher by 0.74% at $92.70 on the last check Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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