Cloud 9fin
In private credit, smaller is sometimes better
Apr 7, 2025
Bill Sacher, a Partner and the head of private credit at Adams Street, delves into the fascinating world of private credit investing focused on the core middle market. He discusses the appeal of smaller companies with sub-$50 million EBITDA, where covenant structures remain robust. As larger managers compete for deals, Sacher highlights the optimism around recovering deal flow despite challenges like inflation and geopolitical risks. The conversation also touches on the pressures of pricing in this dynamic landscape and the resurgence of fundraising efforts amidst evolving investor demands.
18:44
Episode guests
AI Summary
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- Deal flow in the core middle market is improving, driven by strong sponsor motivation and favorable financing conditions despite external uncertainties.
- Fundraising in the private credit sector is robust, reflecting growing interest from investors and shifting dynamics towards co-investment strategies.
Deep dives
Current Deal Flow in the Middle Market
Deal flow in the core middle market is currently improving but remains below average. Factors contributing to optimism include a substantial amount of dry powder in U.S. private equity funds and a strong motivation for sponsors to begin selling due to mounting pressures from limited M&A activity. Additionally, financing markets have become more favorable, with costs decreasing significantly compared to the previous year. However, external uncertainties, such as trade wars and inflation, continue to pose challenges for businesses, complicating the prediction of a full market recovery.
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
