Business Breakdowns

The Evolution of Private Credit - [Business Breakdowns, EP.163]

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May 15, 2024
Join Armen Panossian, Co-CEO of Oaktree, a major player in credit management, as he dives into the booming private credit market, now valued at over $2.1 trillion. He discusses the complexities behind this growth, including supply-demand dynamics, innovative lending opportunities, and the impact of high base rates and regulations. Panossian also highlights the importance of strategic partnerships and disciplined underwriting, while addressing the risks of rising interest rates and economic stability concerns.
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INSIGHT

Private Credit Demand

  • Private credit's growth is driven by a supply-demand mismatch.
  • High demand stems from private equity's dry powder and floating-rate appeal.
INSIGHT

Private Credit's Adaptability

  • Private credit repeatedly fills gaps left by public market failures and regulatory changes, like after the financial crisis.
  • This adaptability has led to its substantial growth and expansion into new lending areas.
ADVICE

Choosing Private Equity Partners

  • In private credit, selectively partner with private equity firms.
  • Prioritize firms with sector expertise, strong deal execution, and fair lender treatment.
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