When you’re successful, everyone wants a piece of you. That’s the challenge private credit faces today. Its grown from a small, largely ignored corner of leveraged loans called the middle market two decades ago to an asset class rivaling both broadly syndicated loans and high-yield bonds. And now private credit is drawing attention from sophisticated global institutional as well as retail investors for being an astonishingly helpful way to produce consistent income streams at attractive risk-weighted premiums. 

The limelight has also brought it criticism for being, among other things, an asset bubble waiting to pop, a hiding place for loans of dubious valuations, worse in defaults and losses than public credit, crowded with too many managers doing the same thing, and conspirators with banks in weakening terms and structures at the upper end of the loan market. 

Our forty-five years of direct lending experience and being on the management team of one of the most successful practitioners in the industry (not to mention our weekly Lead Left publications since March, 2008), has given us a unique perspective to separate fact from fiction for investors and observers. Not that the line between the two is always easy to recognize. Particularly when the future upside in the wealth space could make private credit’s unprecedented growth to date pale by comparison.