This episode is sponsored by Arrow Global
To be a successful player in the distressed lending market, one needs to understand the importance of timing. The current macroeconomic environment offers plenty of opportunities for distressed lenders looking to assist businesses struggling with market dislocation, bank retrenchment and policy uncertainty. However, lenders that look to take a more opportunistic approach to the strategy may not be able to deliver the kinds of returns sought by increasingly sophisticated investors.
In this episode, we speak with Zach Lewy, founder, CEO, and chief investment officer of Arrow Global, to discuss the importance of taking a long-term view on potential targets and the opportunities and risks associated with the strategy.
We also explore why default rates are no longer truly indicative of distress in the market and why lenders who have pan-European footprints are particularly well-placed to benefit from market dislocation.
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Oaktree on its $16bn opportunistic debt fund
Oaktree Capital Management’s announcement in early February that its Opportunities Fund XII had raised $16 billion – inclusive of co-investments and affiliated investment vehicles – represented the largest fundraise for an opportunistic/distressed debt fund to date.
Brook Hinchman and Jared Parker – both managing directors and co-heads of North America for Oaktree’s Global Opportunities strategy, joined The Private Debt Investor Podcast to discuss the strategy and how a mixture of factors including tariffs, liability management exercises and the path forward for interest rates are influencing decision making as the fund’s investment phase is in full swing.
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What's driving the growth of private credit secondaries
This episode first appeared on Secondaries Investor's Second Thoughts podcast, which you can subscribe to by clicking here, or searching wherever you listen to podcasts.
Private credit secondaries has the potential to surpass private equity in deal volume over the longer term as more secondaries investors pursue yield and diversification amid market volatility.
Over the past year, several billion-dollar-plus deals have emerged in the credit secondaries space, including Coller Capital's recent acquisition of a $1.6 billion portfolio from American National and TPG Angelo Gordon's $1.5 billion continuation fund. Firms like Coller, Pantheon, Apollo Global Management and Ares Management have also launched dedicated credit secondaries strategies.
In this episode, Michael Schad, head of secondaries at Coller Capital, and Gerald Cooper, global co-head of secondaries advisory at Campbell Lutyens, speak with Secondaries Investor Americas correspondent Hannah Zhang about the evolution of the private credit secondaries market and where the next opportunities may emerge.
"Most of the asset managers are sitting on tens of billions of NAV. So it lends itself to a secondary opportunity that is inevitably going to continue to grow and be of scale," Cooper said in the podcast. "I think as we look five to 10 years down the road, we are hopeful that we are going to see more specialised pockets of capital come into the space."
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The road to the 'golden age' starts here
Over the last few years, talk of private credit’s “golden age” has grown louder, with predictions from various sources that the asset class could eventually grow to around $20-25 trillion in size from its current level of $2-3 trillion. Yet, fundraising has slowed since its peak in 2021. So was all the talk premature?
Jess Larsen, founder and chief executive officer of private credit-focused placement agent Briarcliffe Credit Partners, believes that it was – but he also believes this is the year when a corner will be turned and private credit will start the journey that could see it one day become larger than private equity.
In this episode, Larsen also shares his thoughts on direct lending and predicts that economy of scale will become all the more crucial, and could lead to the emergence of $100 billion evergreen mega-funds.
On today’s hot topic of tariffs, he does not think signs of the investor response will start to emerge for another few months, but with volatility “the order of the day” in his words, he thinks it’s inevitable that LPs will focus on building all-weather portfolios that go well beyond the confines of direct lending.
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Cashflow is king: Making the case for asset-based finance
This episode is sponsored by Rithm Capital
The asset-based finance market is heating up, with a raft of private credit investors increasingly taking note of the strategy – and for good reason. Capable of delivering strong returns even in challenging macroeconomic environments due to its cashflow-oriented nature, ABF represents a rather unique offering for lenders and LPs alike.
But contrary to what many might think, ABF is not a particularly new strategy. Michael Nierenberg is Chairman, Chief Executive Officer and President of Rithm Capital, a global asset manager focused on real estate, credit and financial services which makes direct investments and operates several wholly-owned operating businesses.
In this episode, he explains how the market has evolved over his more than 30 years in the industry. He also discusses which industries are particularly well-positioned to benefit from ABF strategies and why he believes ABF is an area in which investors are underinvested.
Want to be kept well informed about all the emerging trends and key developments in private debt investment? You’ll find what you need right here, where PDI’s reporters and analysts share their own deep insights, as well as speak with many of the asset class’s most prominent individuals, on topics like deal origination and execution, fundraising, regulation, technological innovation, sustainability and all things private credit.
Ireland