On September 17, private credit industry insiders and leaders will come together within sight of historic St. Paul’s Cathedral for our second annual Private Credit Summit – London. The day will feature insightful panels on private credit trends and opportunities, along with unprecedented opportunities to network with the investors and experts who are driving private credit forward.
The event comes at an exciting but dynamic moment for the industry, with the momentum from years of outsized growth facing new headwinds from regulators, the media and more. For an overview of some of the key trends shaping this moment, see below for highlights from our 11th annual Private Credit Summit in New York, held earlier this summer.
Emceed by Sonali Basak, chief investment strategist at iCapital and a former Bloomberg reporter, the Summit’s interactive sessions featured panels of industry leaders weighing in on some of the biggest questions in the private credit space. The day began with a special roundtable discussion for private credit general counsel, hosted by Dechert partner Chris Duerden and featuring partners Robert Shapiro and Jon Streeter alongside leaders from Apollo, Barings, KKR and Lord Abbett. In a candid and lively discussion, the panel addressed current regulatory enforcement trends, litigation risk and compliance priorities in private credit.
Up next, the general session kicked off with the first-ever Private Credit Summit Showdown, a gameshow-style lightning round, hosted by Dechert partners Jay Alicandri and John Timperio, in which two teams of senior private credit executives fielded questions on the private credit news cycle, the role of insurance investors, their perspectives on AI and software, industry evolution and much more. To see how your industry knowledge stacks up, see the Showdown trivia questions here.
Following the Showdown, Patrick Frisch of ING moderated a discussion on how recent hot topics are influencing ratings, financing and investor appetite; Bill Bielefeld of Dechert led a panel on private credit strategy and scale; and Dechert’s Tom Friedmann hosted a senior leader panel covering the most exciting short and medium-term opportunities for the private credit industry. While they covered different topics, each of the panels referenced some key big-picture themes that are shaping the wider world of private credit. See below for more.
1. Investment Grade Private Credit
Why it matters:
Investment grade private credit has moved from a niche insurance conversation to what many regard as the defining growth frontier for the largest platforms. The traditional framing of private credit as a sub-investment-grade, sponsor-backed asset class is being actively challenged by geopolitical defense spending, insurance capital deployment and the sheer scale of securitizable assets. For attendees who have spent their careers in middle-market direct lending, the shift represents a strategic inflection point.
What people are saying:
- The addressable market argument is reshaping capital strategy at the largest platforms. Managers focused exclusively on corporate direct lending are capturing roughly $2 trillion of a more than tenfold opportunity once you include contractual securitizable cash flows, the natural feedstock for IG-rated assets.
- Insurance balance sheets have made this the center of gravity, with end-to-end origination allowing managers to extract excess returns and pass them through as higher annuity rates to policyholders
- Geopolitical forces are opening an IG private credit channel that most of the market has not yet internalized. The velocity and quantum of capital needed for defense-related investment is creating demand from investment-grade corporates for private credit solutions at scale, a segment that until recently had no meaningful need for the asset class.
What to watch for:
The IG private credit market will force a bifurcation among the largest platforms: those with the scale and origination infrastructure to compete in a $20 trillion addressable market and those that remain sub-IG specialists. Managers without true end-to-end origination capability may find themselves tourists in a market that rewards control.
2. Private Credit Secondaries
Why it matters:
Private credit secondaries were among the most discussed emerging opportunities at the event, which is notable because 18 months ago the topic barely registered. The combination of a growing secondary market, a DPI challenge across private equity and elevated redemption pressure on retail credit vehicles has created a meaningful supply of assets seeking liquidity.
What people are saying:
- The DPI drought is the engine. The median 2021 private equity fund has returned minimal DPI. With traditional realizations frozen and continuation vehicles proliferating, LPs need any mechanism to generate cash.
- Notably, when continuation vehicles are executed on well-performing private credit portfolios, the majority of existing LPs have opted for liquidity rather than rolling, not because assets are troubled but simply because they need cash from somewhere and private credit is one of the few places they can get it.
- The underwriting advantage for incumbents is real. Unlike private equity secondaries, where buyers assess blind pool risk on unfamiliar companies, private credit secondary buyers are underwriting known names, often loans they hold or have evaluated themselves.
What to watch for:
Private credit secondary market volume has effectively doubled year-over-year and now stands at approximately $20 billion. The structural growth drivers including LP over-allocation, GP continuation vehicles and retail redemption recycling are durable. The near-term risk is that the space attracts so much capital so quickly that pricing discounts compress before the opportunity matures.
3. Stakes / GP Stakes
Why it matters:
GP stakes and NAV-based lending have evolved from curiosities to core liquidity solutions in an environment defined by frozen distributions and LP fatigue. While distinct instruments, both are growing from the same root cause. For many panelists the topic surfaced a deeper structural concern: the traditional LP re-up model that has underpinned private credit fundraising for a decade is under stress and a new ecosystem of capital formation including rated feeders, CLO structures and continuation vehicles is gradually replacing it.
What people are saying:
- GPs are asset-rich and cash-poor and the tools being deployed to address that are multiplying rapidly.
- NAV lending against fund portfolios, GP stakes sales and structured and preferred equity solutions are all responding to the same set of sponsor pressures: need for liquidity, desire to avoid forced realizations and pressure to retain control. The private credit community is finding ways to address all three simultaneously.
- The re-up model is under growing pressure. An increasing share of private credit fundraising now comes from sources that do not re-up in the traditional sense, including rated feeders, sovereign co-investments and portfolio sales. The long-term implications for manager-LP relationships and fundraising dynamics are still being worked through.
What to watch for:
Geopolitical reorientation among sovereign wealth funds, particularly Gulf states, where domestic capital deployment is becoming an increasing policy priority. If that dynamic accelerates, it would remove one of the largest marginal buyers from the private markets ecosystem although the timing and pace of any reallocation remain uncertain. At the same time the structured equity and solutions space is likely to grow substantially as long as M&A volumes remain depressed and sponsors need creative capital to manage aging portfolio companies; the key question for buyers is whether return profiles adequately compensate for the complexity and subordination risk these instruments carry.
4. Strategic Partnerships and Consolidation
Why it matters:
Consolidation has been predicted at private credit conferences for a decade and has not yet materialized at the expected pace. That may finally be changing. The combination of retail redemption pressure, rising operational costs, technology requirements and LP preference for fewer larger managers is creating genuine structural pressure on sub-scale platforms.
What people are saying:
- The math on scale is becoming undeniable. The top 10 interval fund managers control roughly 75 percent of the total market while the next 300 control 25 percent.
- Running a compliant, operationally robust private credit business requires organizations of several hundred people even at the largest platforms, with the majority of headcount in accounting, finance, legal and compliance rather than investment management.
- This fixed cost burden effectively prices out players below a certain AUM threshold regardless of investment quality.
What to watch for:
Expect inorganic activity to accelerate among smaller and mid-sized platforms over the next two to three years, driven by inability to compete on fundraising distribution, technology investment and operational infrastructure. This dynamic is distinct from, but connected to, a separate consolidation pressure emerging at the very largest end of the market: the IG private credit opportunity will further concentrate activity among a handful of platforms with the origination scale needed to compete in what panelists described as a $40 trillion addressable market.
5. "Throwing the Baby Out with the Bathwater" (Software / Tech Lending)
Why it matters:
Few topics generated more nuance or more frustration among panelists than the market's treatment of software credit exposure. The press narrative of an impending “SaaSocalypse” has driven indiscriminate selling of software loan exposure by managers facing redemption pressure and headline risk, even where underlying credits are performing well. For one panelist the baby-out-with-the-bathwater dynamic represents one of the most actionable near-term opportunities in the market but also a genuine longer-term risk that deserves honest acknowledgment alongside the opportunistic framing.
What people are saying:
- The structural credit position in software is materially safer than the headlines suggest, but the 2028 maturity wall is real and underappreciated. According to figures cited during the program, senior secured lenders are in at three-to-five times EBITDA on most software credits while private equity sponsors are marked at 20-plus times. The credit risk and equity risk are not the same thing and the press is conflating them.
- That said, a significant concentration of software debt matures around 2028, around the same time that AI disruption of software business models is expected to intensify. Large managers have signaled an intention to reduce software exposure which will constrain the refinancing market at exactly the wrong moment.
- The indiscriminate sell-off has created a genuine alpha opportunity for specialists willing to do the work. The parallel drawn was to directories businesses a decade ago: equity worth zero, but robust cash flows that support disciplined credit structures through a managed wind-down.
What to watch for:
Software credit is likely to transition over the next 12-18 months from a source of headline fear to a source of opportunistic deal flow for managers with the sector expertise to distinguish survivors from casualties. Watch for a new generation of structured software credit products, amortizing and cash-flow-harvesting with tight covenants, to emerge as the equity story fades. More broadly, some panelists suggested that AI disruption will create a second wave of baby-out-with-the-bathwater situations in sectors currently outside the blast radius including portions of business services and financial services that the market is not yet pricing.
Participating Speakers
Thank you to all of our participating speakers, each of whom was generous with their time, experience and insights:
- Timothy Lyne, Chief Executive Officer, Antares Capital
- Michael Paniwozik, Apollo Global Management
- Vincent Salerno, Ares Management
- Troy Ward, Ares Management
- Ted Goldthorpe, Partner, Head of BC Partners Credit, BC Partners
- Victoria Chant, Blackstone
- Meghan Neenan, Fitch Ratings
- Andy Frank, Fortress Investment Group
- Gregory Cashman, Golub Capital
- Grishma Parekh, President of HLEND, HPS
- Grace Fu, ING
- Al Laufenberg, KBW/Stifel
- Stephan Kuppenheimer, Lord Abbett
- Orit Mizrachi, Morgan Stanley
- Stephen Ketchum, Founder, Managing Partner, Chief Executive Officer and Chief Investment Officer, Sound Point Capital Management
- Kunal Soni, Thoma Bravo
- Kristine Jurczyk, Vista Credit Partners
