TIP588: Lucrative Opportunities in Private Credit w/ Nelson Chu
We Study Billionaires - The Investor’s Podcast Network
Intro
This chapter delves into the evolving landscape of private credit markets, emphasizing insights from an experienced entrepreneur. It covers the shift away from traditional investing strategies, the rise of private credit deals, and the current trends in investor demand for high-yield opportunities.
On today’s episode, Clay is joined by Nelson Chu to do a deep dive on private credit.
Nelson Chu is an experienced serial entrepreneur and the Founder and CEO of Percent, the modern credit marketplace. After witnessing the inefficiencies in the private credit markets, Nelson was inspired to transform this industry for the better and founded Percent in 2018.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro.
02:25 - Why we may continue to see a decline in the use of the 60/40 portfolio.
06:56 - The state of credit markets today.
12:38 - How private credit fits into the bigger credit market picture.
13:16 - What has led to the massive growth of private credit since the great financial crisis.
17:22 - How a typical private credit deal is structured.
22:50 - Why companies utilize private credit in their capital structure.
26:05 - Current interest rates in a private credit deal.
26:26 - Default rates in private credit.
38:40 - How Percent is helping satisfy high demand in the private credit market.
41:23 - How to get diversified in private credit.
52:02 - The most important things to understand prior to investing in private credit.
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Check out our newly released TIP Mastermind Community.
- Learn more about Percent.
- Learn more about the Berkshire Summit by clicking here or emailing Clay at clay@theinvestorspodcast.com.
- Related Episode: TIP559 Mastering the Market Cycle by Howard Marks or watch the video.
- Follow Clay on Twitter.
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