This report explores the role of private capital in the financial services sector. Recovery is the new normal for today’s global banking industry. Although most banks are much healthier than they were in 2008, the industry is still faced with an uncertain global economy, low interest rates, increased regulation, activist investors and disruptors like fintech.
In this environment, private capital plays an increasingly important role, whether in the form of PE firms, loan purchasing, venture capital investing, lending by insurers or direct lending through debt funds. Private capital firms are buying up bank debt, acquiring banking businesses, entering markets where regulations discourage bank lending, and investing in payment platforms and other fintech challengers.
As banks continue to evolve their business models, private capital will influence what a bank looks like in terms of structure, offerings and interaction with customers.