Invest Like the Best with Patrick O'Shaughnessy Ali Hamed – An Update on Private Credit - [Invest Like the Best, EP.172]
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May 5, 2020 
Ali Hamed, a private credit expert, returns with insights on current market dynamics and opportunities. He discusses the impact of COVID on private credit, highlighting which areas have stalled and where investors can find growth. Hamed emphasizes the importance of focusing on quality over returns amid uncertainty and explores the rise of digital business models. He also dives into the complexities of junior versus senior debt, and how evolving online platforms are redefining small businesses and investment strategies.
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Systemic Risks in Private Credit
- Systemic risk in private credit is less likely due to asset diversity, but unpredictable events can still cause unexpected impacts.
- Defaults take time due to triggers like consecutive missed payments rather than single instances.
Factoring Government Response
- Investors haven't fully priced in government support due to uncertainty around its effectiveness.
- Instead of increasing yields, lenders are lowering advance rates to mitigate potential losses.
Originator Adaptation and Tech-Enabled Assets
- Originators are adapting faster than private credit funds, exemplified by STEM financing musicians' streaming revenues.
- Tech-enabled assets benefit from increased usage during the pandemic, offering opportunities to finance related services.