The rise of private credit is closely tied to the evolution of banking regulation over the last three decades. But regulation isn’t the whole story. This piece explains how non-bank lenders became central to private equity financing—and why we believe it’s unlikely banks can wind back the clock and reclaim their historic role.
Investors often ask whether the private credit market has gotten more crowded. We think it depends where you look. This piece details the recent outsized growth in direct lending funds that concentrate in the upper middle market, managed by a handful of large, publicly traded alternative managers who have little option but to “go big.”
The debate over large market vs. lower middle market lending comes up often, but neither side has it exactly right. We believe the fixation on size misses the point. Strong credit investing comes down to identifying resilient businesses, maintaining strict documentation and pricing risk correctly—none of which has to do with check size.
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Dispersion & Persistence of Manager Performance in Direct Lending
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