3 Historically, loan syndications, which include both loan commitments and term loans, were predominantly funded by banks. But in the period from 2001 through 2006, when the amount of term loans to U.S. nonfinancial corporations rose from $ billion to more than $ billion, the nonbank share of such lending rose from less than one-half to roughly two-thirds.
The institutional investors in these loans include mutual funds, insurance companies, pension funds, and hedge funds. In the mid-1990s, mutual funds were the most important type of institutional investor in these markets. More recently, identifying the ultimate sources of institutional demand has become more difficult.