The Evolution of Private Credit - [Business Breakdowns, EP.163]

Business Breakdowns

Today, we have a special two-part episode on private credit. In 2023, the global private credit market topped $2.1 trillion in assets and committed capital. Rather than making blanket statements like private credit is an emerging bubble, we wanted to explore the various segments of private credit and ask simple questions like “Where is this growth coming from?”, take a closer look at supply and demand, and capture some of the nuance that is so important to any analysis of these emerging markets.

To start, we use the lens of a successful fund manager in the space, Armen Panossian, the co-CEO of Oaktree. Beyond Howard Mark's famous memos, Oaktree is a $192 billion asset manager known for its long history in credit. We hope these conversations give you a better sense of what's happening in the private credit ecosystem, the difference between strategies and wrappers, the demand for private credit solutions, how regulations have impacted this market, and much more. Please enjoy this breakdown on private credit.

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Show Notes

(00:00:00) - Welcome to Business Breakdowns

(00:06:32) - Deep Dive into Private Credit: A Growing Market

(00:08:47) - Exploring the Dynamics of Supply and Demand in Private Credit

(00:11:38) - The Evolution of Private Credit Since the Global Financial Crisis

(00:15:58) - The Role of Private Equity and Banks in Private Credit

(00:19:33) - Building a Sustainable Advantage in Private Credit Strategies

(00:24:02) - Innovative Financing: The Case of Life Sciences Lending

(00:27:53) - Identifying New Opportunities: Infrastructure Lending and Rescue Financing

(00:30:40) - The Importance of Fund Size in Private Credit Strategies

(00:33:02) - Oaktree's Approach to Private Credit Products

(00:36:55) - Investment Strategy and Allocation Across Funds

(00:39:42) - Risk Management and Restructuring Expertise in Private Credit

(00:42:19) - Navigating the Secondary Market for Private Loans

(00:44:06) - Evolving Landscape of the Distressed Debt Market

(00:47:43) - Impact of COVID on Private Credit Valuations

(00:51:46) - Oaktree and Brookfield: A Strategic Partnership

(00:53:33) - Future Considerations: Rates, Elections, and Economic Implications