One of the frequent observations of private credit, usually couched as a complaint, is how many competitors are crowding into the asset class. In part this is due to the increasingly specialized strategies managers are employing that all fit into the PC classification. 

A few years back, we received a gift membership for a popular fitness club. On the first visit, we found the parking lot so crowded the only available space was a block away. Won’t be using place this much, we thought. But once inside, the activity level seemed surprisingly reasonable, and we easily found a quiet corner for our modest physical exertions. Where was everybody?

Turned out there were a dozen classes going on in the building. Stretching, boxing, cycling, yoga, dance, barre, Pilates, and one windowless room requiring special entry cards. (Still not sure what happens there.) Over time we realized this was a useful metaphor for private credit. From the outside it looks ridiculously crowded. But once inside it’s clear many different and useful things are happening without one interfering with the others.