Commentary

Why Portfolio Construction Matters (Third of a Series)

Many direct lenders have oriented their platforms around financing only businesses backed by private equity sponsors. While non-sponsored strategies have certain benefits, the presence of an owner with its own separate track record, select industry experience, and deal sourcing prowess to draft behind, gives relationship lenders distinct advantages. This is particularly true when it comes

Why Portfolio Construction Matters (Second of a Series)

“What’s the key portfolio strategy managers should employ for success?” “Diversify!” That’s how one top PM answered our question. There are many levels and measures of diversity. You don’t want to be stuck with large exposures in any one industry, no matter how resilient it may seem. Healthcare, 20% of the US economy, is a

Why Portfolio Construction Matters (First of a Series)

What makes for successful portfolio construction in private credit? That was one of the questions panelists addressed at the Private Credit Investor Summit last week. The issue carries more urgency amid current public market turmoil. Equities tumbled this week after a worse-than-expected May CPI report. Besides the number itself (8.6%), highest in four decades, the

Fed Up, Slow Down

What made Kane Tanaka so special? As the oldest living person on the planet until her passing last month, Tanaka-san was born (January 2, 1903) almost a year before the Wright Brothers’ historic first flight at Kitty Hawk. Her secret to a long life? “Being myself.” Sticking to your knitting was top of mind this

Touch and Go

The old Naval Air Station in Charlestown, RI was right next to the summer house we lived in as kids. Aviators would fly training patterns over our heads, so close we could see their orange flight suits. They would circle back to the airfield, touch wheels down, then come back around. Though we couldn’t see

Breakfast of Champions

If it’s not one thing, it’s another. The FDA last month began a formal investigation into complaints that eating Lucky Charms was making people sick. On www.iwaspoisoned.com, a social media forum for food ingestion concerns, over 7000 reported serious stomach problems after eating the popular cereal. As responsible adults we had always assumed breakfast items

Why ESG Matters (Last of a Series)

We noted last week how various asset classes incorporate aspects of environmental, social and governance elements in their risk analysis of a business or manager. We wrap up our special series by examining how private credit integrates ESG into its various strategies. Credit managers are typically not involved in the direct management of businesses they

Why ESG Matters (Seventh of a Series)

Now that we’ve established the broad sweep of ESG’s domain as well as the challenges of reporting and disclosure, let’s take a look at how it gets implemented across various asset classes. Traditionally ESG resided in public equities given shareholder’s theoretical ability to change corporate behavior. As we saw in our earlier study of the

Why ESG Matters (Sixth of a Series)

So far in this special series we’ve outlined the history of the ESG movement, its complexities and challenges, and current themes in climate and social change, and governance. It’s clear that compelling dynamics are behind ESG in all its aspects. It’s also evident that defining, let alone organizing or regulating, such a multi-dimensional entity goes

Why ESG Matters (Fifth of a Series)

Now we come to the G in ESG. Governance’s link to environmental and social goals was cemented by the sub-prime debacle and resulting GFC. Corporate malfeasance and lack of transparency propelled the need to identify future responsible ESG parties and enforcement. The challenge, as one expert told us, is while governing considerations are most in