Macro Hive Conversations With Bilal Hafeez Ep. 258: Randy Schwimmer on Why Private Credit Is Performing
Mar 7, 2025
Randy Schwimmer, Vice Chairman of Churchill Asset Management, shares his expertise in private credit and capital markets. He discusses the current macroeconomic landscape's impact on private credit, highlighting trends in service-oriented businesses and the significance of free cash flow. The conversation delves into deal activity, M&A, and LBO complexities, while also addressing how direct lending managers adapt to interest rate fluctuations. Additionally, Schwimmer touches on the transformative role of AI in portfolio management within private equity.
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Episode notes
Private Credit's Rise
- Private credit became more attractive after the Great Recession.
- It proved more resilient due to long-term liabilities matching long-term assets, minimizing depositor risk.
Illiquidity as Strength
- Illiquidity in private credit, once considered a weakness, is now a strength.
- Holding assets until value returns, coupled with aligned lender groups, stabilizes valuations.
Weathering the Storm
- Randy Schwimmer explains how Churchill weathered rising interest rates.
- They modeled higher rates and recessions in their projections, creating a resilient portfolio.