Credit Exchange with Lisa Lee

“We certainly have noted from an oil price or fuel price perspective, just how comfortable businesses have gotten with oil price or gas price pass-throughs,” says Aaron Kless, CEO and CIO of direct lending specialist Andalusian Credit Partners, on the latest edition of Credit Exchange with Lisa Lee. “They’ve really been able to manage that price volatility, and price spikes, quite well.” Andalusia...

“Last frontiers of alpha is in the sports and entertainment-related real estate,” says Jonathan Fascitelli, founder and CEO of sport and entertainment real estate firm Seregh, on a special edition of Credit Exchange with Lisa Lee, recorded at the FII Institute’s conference in Rome. Just 18 months since founding, Seregh already has more than $35 billion in their pipeline. Seregh, which has the back...

“We’re clearly in late cycle, but we’re not obviously at the turning point,” says Ariadna Stefanescu, co-head of Permira Credit, in the latest edition of Credit Exchange with Lisa Lee. Permira is a global investment firm with buyout and credit businesses holding nearly €90 billion in committed capital. The current environment provides an opportunity for different managers to differentiate themselv...

Middle-market direct lending finances growing businesses, says Gauthier Reymondier, head of European credit at Bain Capital, a private equity and credit powerhouse with more than $225 billion in assets under management. Reymondier speaks about the fundamental difference between US and European economic growth, the impact of artificial intelligence and capex spending, and consumer habits. While Eur...

Issues in the software space and a looming maturity wall will result in a return to more traditional distressed opportunities, says Jeff Kivitz, chief investment officer at Canyon Partners, on the latest episode of Credit Exchange with Lisa Lee. There’s a wall of software debt maturities looming and while in the past these have “magically gone away, I think this wall is a little bit different,” Ki...

“We’re starting to see some impact on cost. Very manageable, but it’s hard to ignore,” says Alex Chi, deputy CIO of global credit at Carlyle, one of the world’s largest investment managers with nearly $500bn in assets under management. Speaking on the latest episode of Credit Exchange with Lisa Lee, Chi says that they are being very careful about how they underwrite new credits going forward. But...

The Iran war is currently in a “mushy middle”, says Marko Papic, a macro and geopolitical expert at global investment research firm BCA Research, in the latest episode of Credit Exchange with Lisa Lee. “[What] investors really have to focus on is not the verbiage, not the rhetoric, not the negotiations – but rather, the ships going in and out of Hormuz,” says Papic. While difficult to track, Hormu...

The US healthcare space is very interesting as far as real estate is concerned, says David Mihalick, co-head of global investments at Barings, a $500 billion alternative asset manager with expertise in credit, real assets and emerging markets. Mihalick points to demographic trends with an ageing population and the need for medical offices and senior housing as reasons why Barings is keen. “We thin...

“The dispersion in performance is becoming more visible, certainly to institutional investors,” says James Reynolds, global co-head of private credit at Goldman Sachs, on the latest episode of the Credit Exchange podcast with Lisa Lee. “It’s clear, as you travel the world and speak to LPs, that there is a flight to quality happening. There is a flight to quality and scale,” he says. The headlines...

“We’ve been very opportunistic about deployment in cycles or dislocations, which I think we’re in the very early innings of,” says Milwood Hobbs, Jr., deputy chief investment officer of Oaktree’s strategic credit platform, on the latest episode of Credit Exchange with Lisa Lee. There were about USD 200bn of private credit loans inked in 2021 and 2022, when tech-related business valuations had reac...

“Everybody’s still searching for that easy button on AI,” says David Neuenhaus, US head of asset management and private equity at KPMG, on the latest edition of the Credit Exchange podcast with Lisa Lee, taped at the conclusion of the Milken Institute Global Conference in Beverly Hills. Neuenhaus says AI was among the hottest topics at the conference, which featured a who’s-who of the finance worl...

“We have ample liquidity,” says Dan Leiter, head of international at Blackstone Credit & Insurance, on the latest episode of Credit Exchange with Lisa Lee, as he explained the firm’s decision to honour all withdrawal requests at its private credit perpetual fund. “[As a result] it was not an issue to honour the redemption, and we thought it was the right thing to do,” says Leiter. Competitors...

Global economies are adjusting to the oil shock from the Iran war, says Juhi Dhawan, macro strategist at Wellington Management, on the latest episode of the Credit Exchange podcast with Lisa Lee – and China has shown surprising resilience that may improve its competitiveness against Europe, Japan and some other Asian countries. Looking at the past performance of economies and markets to oil shocks...

“The doomsday scenario is a complete over-exaggeration,” says David Manlowe, CEO of Benefit Street Partners, on the latest episode of Credit Exchange with Lisa Lee. Manlowe asserts that investors will have time to see the impact of artificial intelligence, which could even help boost margins at software firms. “I don’t see a big company like, for example, Franklin Templeton, ripping out their core...

“We are going to see consumer pain, and particularly on the lower-income side of things,” says David Saitowitz, head of US liquid credit at ICG, a global alternative asset manager with $127 billion in AUM, on the latest Credit Exchange podcast with Lisa Lee. That means certain sectors could get hurt while others do very well, he says, adding that it’s a trend he’s already seeing. Anything consumer...

Private credit firms, including Hayfin, are still willing to lend to software companies, says Marc Chowrimootoo, co-head of direct lending at alternative asset manager Hayfin, on the latest episode of the Credit Exchange podcast with Lisa Lee. “If that call comes in, we absolutely take that call,” says Chowrimootoo, on how he responds to a request from a private equity fund for a software LBO fina...

The current period is a “really important rite of passage” for retail access to private credit and direct lending, says Tristram Leach, head of investments Europe at Apollo Global Management, on the latest episode of Credit Exchange with Lisa Lee. “The five percent number is there for a reason,” says Leach, speaking about recent outflows from semi-liquid private credit funds that have seen a picku...

“We’ve never had more undrawn capital,” says Jonathan Dorfman, chief investment officer at Napier Park Global Capital, a $40bn alternative credit manager. Napier Park has been prepping for a repricing of financial assets that predates the Iran war and the software crisis, Dorfman said in the latest episode of Credit Exchange with Lisa Lee. Have ready cash and take advantage to buy assets that are...

“Private markets and private credit can be very, very helpful,” says Andrew Davies, in reference to the emerging dislocations he sees in financial markets, on the latest Credit Exchange podcast with Lisa Lee. Davies is the head of credit at CVC Capital Partners, a global private markets manager with more than EUR 200bn in AUM. That help could be in the form of helping banks that are struggling to...

“You are going to hit a little bit of a wall because of power. You’re going to hit a little bit of a wall, because of the sheer capital that’s supposed to be there to finance that piece,” says Joel Holsinger, co-head of alternative credit at Ares Management, on the latest edition of Credit Exchange with Lisa Lee. Holsinger expects to see a slowdown, because the current level is “probably unsustain...

The investing environment has gotten hard, says Christopher Sheldon, co-head of credit and capital markets at KKR, on the latest episode of Credit Exchange with Lisa Lee. “It’s adult swim only.” There’s a lot of uncertainty in the market, and much of the investor community is trying to figure out what playing field they’re on, explains Sheldon. He discusses KKR’s latest investor letter, titled CTR...

Europe has mostly missed the AI boom that’s driven a large part of US economic growth, says Mathew Cestar, president of Arini Capital Management, on the latest episode of Credit Exchange with Lisa Lee, taped in the London offices of the alternative asset manager. But that actually makes European credit more appealing, because while the intersection of technology and AI is an exciting equity story,...

“We have this great tool out there called AI, and we haven’t 100% figured out how to implement it yet,” says Mark Jenkins, co-president and head of global credit & insurance at Carlyle, on the latest edition of ‘Credit Exchange with Lisa Lee’. Jenkins predicts that the next stage is going to be how corporates implement AI into their workflows, and that the process is “really in the first innin...

“Whether it be in the high yield bond market or in the leveraged loan market, even the hint or threat of AI impeding on really any sector – you see pretty significant downside,” says Mitch Garfin, co-head of leveraged finance at the world’s largest asset manager BlackRock, on the latest episode of Credit Exchange with Lisa Lee. Garfin is constructive on the market generally, with growth continuing...

“It’s going to be a slow build, and we think a sustained multi-year increase in activity,” says David Miller, head of private credit and equity at Morgan Stanley Investment Management, on the latest episode of Credit Exchange with Lisa Lee, speaking about M&A and LBOs. The geopolitical headlines haven’t yet changed the economic picture, says Miller. But over time, they may impact on confidence...