Driven by a steepening correction in the equity markets and the continuation of a sluggish economic recovery, investors are increasingly migrating toward private fixed income investments and other sources of competitive yield, says Old Hill Partners, Inc., in its latest market commentary. With U.S. interest rates remaining steady, and global economic performance unlikely to lead to a near-term shift in U.S. interest rate policy, yields across the board remain depressed.

At the same time, the commentary says, the banking industry – grappling with regulatory concerns – has curtailed lending, especially to small- and mid-sized companies. In this environment, asset-backed lenders are filling an important void, leveraging structured credit facilities to provide these companies with capital they require while giving investors highly competitive yields. Old Hill Partners’ Asset Income Strategy has continued to rise amid market turbulence.

“Given current market conditions, investors have to look outside the equity markets for yield,” said John Howe, CEO of Old Hill Partners, Inc. “At the same time, we are seeing a continuation of the tighter regulatory environment that has led traditional banks to scale back lending. These two trends are converging to make asset-backed lending a very attractive option for borrowers looking for capital injections and investors seeking yield.”

Howe notes that the balancing act for successful asset-backed lenders will be putting in place strong due diligence procedures when evaluating transactions in order to identify which deals are the most secure and determining the creditworthiness of the issuer, while delivering the greatest risk adjusted return to investors.

For a full copy of Old Hill’s September market commentary, visit http://www.oldhill.com/blog/old-hill-asset-backed-lending-september-commentary/.

Old Hill Partners Inc., headquartered in Darien, Connecticut, is an SEC-registered investment adviser with significant experience in all facets of asset-backed lending and alternative investment management. The firm offers customized lending products and services to small and middle-market clients and works closely with borrowers and partners to provide creative funding structures to support near- to mid-term growth initiatives. Founded by John C. Howe in 1996, Old Hill has funded approximately $600 million in asset-backed lending transactions, and has approximately $670 million in assets.