Decided to share some weekend thoughts on this given there has been a fait bit of hyperbole on the topic over the past couple of weeks.
Also because indiscriminate selling typically generates opportunities for anyone willing to do the work and look past the headlines.
I’ve been critical of many aspects of the private credit bubble as GPs battle for AUM growth amid a “race to the bottom” in terms of underwriting standards.
The objective of this post is to briefly separate fact from fiction before taking a closer look at whether the current debacle is a source of opportunity.
For background I have >12 years experience at various Megafund GPs and am well-versed in the credit space. I regularly speak with major GPs and LPs.
Fact or Fiction: Private Credit is a larger share of the economy and underwriting standards have been deteriorating
Yes this is absolutely true. Bank regulation has allowed an entire non-bank lending ecosystem to develop and fill the vacuum. The AUM of Credit related strateg…