In his 1985 best-selling “A Passion for Excellence,” Tom Peters tells the story of General Bill Creech, who led a reorganization of the US military’s airplane maintenance crews. His NCO’s process improvement plan involved assigning personnel to the same planes over extended periods of time, rather than switching them out more quickly. When the general…
The Fed’s rate cut last week of 25 bps brings the funds benchmark down to 3.75-4.00%. That’s roughly 150 bps lower than its peak back in July 2023. Buried in this news were two interesting developments. Chair Powell remarked that “there were strongly differing views on how to proceed in December.” Of the twelve FOMC…
We wrap our recent MENA travelogue with a keen look at Abu Dubai and Dubai, the principal emirates of the UAE. According to the Khaleej Times, the region “is emerging as a global magnet for capital, bolstered by rising foreign investor appetite, strong fundamentals, and a robust pipeline of IPOs across diverse sectors.” Given this…
We were in the 4th grade when a food fight erupted in the cafeteria at the table next to us. The lunch monitor came over, looked at the offenders, then turned to us. “This behavior is unacceptable,” she said. “Report to detention in my class after school.” “What? But Mrs. Diaz,” we protested, “they were the…
When we visited friends and clients in Kuwait last November, we noted increased sophistication of institutional and sovereign wealth investors around private capital. That trend continues. As with Oman, Kuwait has a sovereign wealth fund, though significantly larger at $1 trillion, making it the fifth largest in the world. Like the OIA, the Kuwait Investment…
Our first visit to Oman last week was remarkable in several respects. We were reminded again how regional countries – whether in Europe, Asia, or MENA – can be so similar yet so different. Oman, like Saudi Arabia, Kuwait, Qatar and the UAE, is a monarchy, yet is unique in being a sultanate. It is…
During the recent PDI webinar we were asked, beyond yield, diversification, and deployment, what private credit areas are most vulnerable? What scenarios could likely create problems? These questions are excellent ones, because they allow us to tease out the differences among private capital managers, not just throw the entire asset class out with the bath…
Beyond yield, advisors and direct contribution (DC) plans look to private credit for diversification and deployment. These goals are not unrelated. Quantity over quality, particularly at the higher end of the middle market or the large cap space, can result in chunky portfolio positions. These can add significantly to risk. A default or loss in…
We recently joined several colleagues on an excellent PDI podcast – “New Era of Private Credit” – for a wide-ranging discussion of investment topics. We’ll include a link to the final published version when available but thought it would be profitable to expand on the conversation. Let’s begin with this question: “What is driving the…
Post-Labor Day market conditions continue to favor credit issuance of all stripes. Rather than being hampered by uncertainty surrounding tariffs, inflation, growth or rates, borrowers and investors have decided these dynamics have been settled in favor of “risk on!” What then are the real worries for credit? While lower rates and less chance of a…