FICC Focus Credit Crunch: KKR’s Pietrzak on Asset-Based Finance, AI Impact
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Dec 15, 2025 In this engaging discussion, Daniel Pietrzak, a Partner and Global Head of Private Credit at KKR, sheds light on private credit markets and their resilience. He clarifies misconceptions around asset fire sales and emphasizes the significant growth potential in asset-based finance. The conversation delves into the impact of AI on lending decisions, as well as diversification strategies to mitigate risks. Pietrzak also explores international market dynamics and the evolving landscape of private investments, offering valuable insights into future opportunities.
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Private Credit Is Broader Than Headlines
- Private credit covers privately originated, privately negotiated loans beyond direct lending and is broader than the commonly cited $2 trillion figure.
- Many headlines confuse private credit with direct lending and ignore asset-based finance and other segments.
Re-Scrub Portfolios After Bad Headlines
- Re-scrub portfolios and reinforce collateral controls when headline risks surface.
- Use independent valuation providers and robust processes to avoid sensational mispricing narratives.
Limited Redemption Reduces Fire-Sale Risk
- Most private credit AUM lacks redemption features, so fire-sale liquidity risks are overstated.
- Loss rates could rise, but structures and investor time horizons reduce forced selling risk.