Private Credit Q&A: Talking sponsored vs. nonsponsored deals with Morgan Stanley’s Ashwin Krishnan

Ashwin Krishnan, co-head of North America private credit at Morgan Stanley Private Credit, emphasizes the firm’s focus on opportunistic credit, providing diverse debt solutions to middle-market companies, specifically those with EBITDA between USD 40 million and USD 80 million. He highlights that both sponsored and nonsponsored deals are equally viable, as the firm's analysis assesses business fundamentals rather than ownership structures.

Morgan Stanley's investment strategy is flexible, enabling them to craft tailored financial solutions, such as a recent off-market healthcare deal where they utilized junior debt and senior equity to meet the company's needs. Regarding payment-in-kind (PIK) options, Krishnan notes that while they aim for a balanced cash yield, they have the flexibility to include PIK securities up to 50% in some cases.

Although they do not have formal banking partnerships, they actively seek collaborations within the private credit space to expand their investment network.