Blackstone Credit's Viral Patel Sees Opportunity for Private Credit to Support Tech Firms Amidst Sluggish IPO Market

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.