Revolutionizing the Opaque Private Credit Industry: How SOLVE is Transforming Data Access with AI and Machine Learning

Insights from Sourav Srimal, SVP, Solutions

SOLVE has emerged as a game-changer in an industry as opaque as Private Credit, where access to accurate and timely data is critical. Leveraging advanced Artificial Intelligence (AI) and machine learning (ML) technologies, SOLVE has developed a best-in-class parser that delivers accurate filing data within minutes of Business Development Companies (BDCs) submitting their Statements of Investments (SOIs) to the SEC. This technological innovation has allowed SOLVE to standardize and digitize BDC data dating back to 2000, effectively creating a comprehensive Private Credit encyclopedia.

Overview of the Private Credit Market

Private credit markets continue to increase in size and importance. It is estimated that they currently stand at around $1.6 trillion. BDCs are the only proxy to the otherwise opaque Private Credit Market. As of Q1 2024, there are 145 BDCs managing over $300 billion in assets, with more than 35,000 investments in ~ 8,000 portfolio companies. BDC filings are the only publicly available data in this space. Through multiple data delivery capabilities, SOLVE not only makes this data accessible but also empowers users to analyze and use it effectively.

Solving Industry Challenges

Streamlined Data Collection

Many firms rely on offshore teams to manually extract data, a process that is prone to errors and inefficiencies. However, SOLVE’s innovative AI and ML-powered solution effectively tackles these challenges by automating the data extraction process. This not only saves valuable time and effort but also significantly enhances the accuracy of the extracted data. Moreover, SOLVE’s parser is trained on a vast dataset comprising 18 million data points spanning back to the year 2000. This extensive dataset encompasses various types of data, including filings and derived data, ensuring that SOLVE’s solution is robust and comprehensive.

Data Standardization and Enrichment

The SEC does not mandate a standard format for BDC filings, leading to inconsistencies in reporting critical data such as Portfolio Company Names, Investment Types, Industry Codes, Non-Accruals, and PIK data. SOLVE’s data model standardizes these elements, and also enriches the dataset with additional details like website URLs and addresses. This standardized data is invaluable for organizations targeting middle-market companies or analyzing BDC investments by geography.

Timeliness

Analysts covering BDCs need timely data to prepare for earnings calls. SOLVE provides data within minutes of filings, giving analysts the insights they need without delay.

Cross-Held Investments

SOLVE’s BDC database, developed in collaboration with industry participants, allows users to screen for cross-held investments and compare quarterly marks. This feature has been particularly beneficial for top BDC managers, saving them significant time in preparing reports.

New Origination Data

Origination teams can now access data on new investments almost in real-time, thanks to SOLVE’s workflow tool, which provides data by vintage going back to 2000.

Advanced Screening

SOLVE has created an advanced filter that allows users to screen Private Credit investments based on various criteria, such as percentage of par or non-accrual status. This tool has proven invaluable for restructuring advisory and law firms.

Data Feed Integration

With the rapid growth in BDC AUM, many firms have started using business intelligence tools to monitor the space. SOLVE’s data feed allows seamless integration with internal systems, enabling firms to build custom dashboards and derive actionable insights.

Custom Templates for Derived Data

Accounting firms and rating agencies leverage SOLVE’s data to create analytics and derived products, such as primary market comps and valuation models.

Increasing Market Transparency

Media giants like The Wall Street Journal, Bloomberg, Financial Times, and Barron’s regularly use SOLVE’s database to report on the Private Credit market, further enhancing transparency in this traditionally opaque industry.

Conclusion

In these dynamic times for the Private Credit Market, access to timely and accurate data is essential for organizational success. SOLVE’s commitment to leveraging AIML technology has not only transformed how data is accessed and analyzed but has also positioned itself as the leading provider of BDC data and analytics in the industry.

How Can SOLVE Help?

SOLVE boasts unparalleled BDC coverage dating back to 2000, delivering standardized filing data within minutes for over 145 BDCs. Users gain instant access to detailed information on each company financed, including investment type, interest rate, cost, fair market value and more. This rich data set enables extensive analysis such as that included here. Clients are utilizing this dataset for both high-level trend analysis and granular portfolio level examination including comparable and deal precedents as it empowers them to swiftly pinpoint trends and outliers, enhancing their market understanding and facilitating opportunity identification. Additionally, SOLVE provides insight into the maturity profile of junk bonds and leverage loans, empowering direct lenders to proactively screen opportunities. Despite BDCs filing quarterly, SOLVE offers real-time quotes on over 2,000 highly illiquid BDC investments. SOLVE also provides a comprehensive view of BDC’s financials and their liabilities.

Elevate your Private Credit strategy with SOLVE, empowering you to establish a robust data infrastructure for unmatched success. Explore the dataset through our SOLVE UI or data feed.

 

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