LPC - Lending Lowdown Series Episode 34| Is the ‘golden age’ of private credit coming to an end?
Aug 14, 2025
Michael Gross, co-founder and CEO of SLR Capital Partners, brings nearly 40 years of expertise in private equity and credit. He discusses the potential end of the 'golden age' for private credit, emphasizing the rising tide of defaults expected in traditional lending. Gross also dives into the rapid growth of Business Development Companies and how demand is shifting towards larger loans. He offers insights on navigating the complexities of asset-based lending amidst rising interest rates, blending optimism with caution for the future of credit markets.
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Career Path And Firm Background
- Michael Gross began his career at Drexel Burnham and co-founded Apollo before starting SLR Capital Partners in 2006.
- SLR has invested about $20 billion across multiple lending strategies with a very low loss rate.
Private Credit Faces Higher Default Risk
- Private credit's appeal is speed and flexible structuring, but many portfolios were built in a zero-rate era and face new strains now.
- Michael Gross expects elevated defaults in traditional private credit portfolios over the next couple of years.
Retail BDCs Changed Investment Incentives
- Non-listed private BDCs have surged, channeling retail capital into private credit and changing industry incentives.
- Perpetual BDC structures force managers to invest inflows quickly, reducing selectivity compared with drawdown funds.