The Evolution of Private Credit - [Business Breakdowns, EP.163]
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. Register for the Business Breakdowns x Founders Conference. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Public: Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account. This episode is brought to you by Tegus, where we're changing the game in investment research. Step away from outdated, inefficient methods and into the future with our platform, proudly hosting over 100,000 transcripts – with over 25,000 transcripts added just this year alone. Our platform grows eight times faster and adds twice as much monthly content as our competitors, putting us at the forefront of the industry. Plus, with 75% of private market transcripts available exclusively on Tegus, we offer insights you simply can't find elsewhere. See the difference a vast, quality-driven transcript library makes. Unlock your free trial at tegus.com/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com). 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