Private Debt Investor Podcast The 'flashing red lights' that were ignored
Dec 1, 2025
Jiri Krol, Deputy CEO of the Alternative Investment Management Association, and Matthias Kirchgaessner, Managing Partner at Plexus Research, dive into the implications of recent corporate failures. Krol discusses the resilience of private debt, suggesting that stress may have peaked, while Kirchgaessner raises concerns about due diligence shortcuts in a competitive market. They explore red flags in failed companies, the risks of buy-and-build strategies, and the potential impact of AI on credit portfolios. A compelling debate unfolds on the true risks within private credit.
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Private Credit Not The Primary Culprit
- Private credit wasn't the main provider to headline failed companies, so those failures don't directly indict the asset class.
- Jiri Krol argues corporate stress exists but private credit exposure in those cases was limited and misleadingly blamed.
Stress Peak From 2021 Vintages
- Private credit stress is peaking as 2021 vintages work through trouble and will produce more restructurings.
- Jiri Krol expects elevated restructurings in 2025 but views the situation as manageable absent a deep macro shock.
Walk Away From Nontransparent Deals
- Walk away if managers or sponsors withhold answers to due-diligence queries.
- Matthias Kirchgaessner stresses that persistent red flags and lack of transparency should lead lenders to refuse financing.