Private Debt Investor Podcast

Oaktree Capital Management’s announcement in early February that its Opportunities Fund XII had raised $16 billion – inclusive of co-investments and affiliated investment vehicles – represented the largest fundraise for an opportunistic/distressed debt fund to date. Brook Hinchman and Jared Parker – both managing directors and co-heads of North America for Oaktree’s Global Opportunities strategy, joined The Private Debt Investor Podcast to discuss the strategy and how a mixture of factors including tariffs, liability management exercises and the path forward for interest rates are influencing decision making as the fund’s investment phase is in full swing.

This episode first appeared on Secondaries Investor's Second Thoughts podcast, which you can subscribe to by clicking here [https://www.secondariesinvestor.com/podcast/], or searching wherever you listen to podcasts. Private credit secondaries has the potential to surpass private equity in deal volume over the longer term as more secondaries investors pursue yield and diversification amid market volatility. Over the past year, several billion-dollar-plus deals have emerged in the credit secondaries space, including Coller Capital [https://www.secondariesinvestor.com/database/institution-profile/id/institution98d5y/coller-capital/lp-fund-commitments]'s recent acquisition [https://www.secondariesinvestor.com/coller-snaps-up-1-6bn-lp-led-credit-portfolio-from-american-national/] of a $1.6 billion portfolio from American National and TPG Angelo Gordon's $1.5 billion continuation fund [https://www.secondariesinvestor.com/tpg-angelo-gordon-runs-1-5bn-plus-gp-led-credit-secondaries-process/]. Firms like Coller, Pantheon [https://www.secondariesinvestor.com/database/institution-profile/id/institution:98a5f/Pantheon/?back-to-search], Apollo Global Management [https://www.secondariesinvestor.com/database/institution-profile/id/institution:98e9f/Apollo%20Global%20Management/?back-to-search] and Ares Management  [https://www.secondariesinvestor.com/database/institution-profile/id/institution:98dg3/Ares%20Management/?back-to-search]have also launched dedicated credit secondaries strategies. In this episode, Michael Schad, head of secondaries at Coller Capital, and Gerald Cooper, global co-head of secondaries advisory at Campbell Lutyens [https://www.secondariesinvestor.com/database/institution-profile/id/institution98bpq/campbell-lutyens/pa-funds-placed], speak with Secondaries Investor Americas correspondent Hannah Zhang about the evolution of the private credit secondaries market and where the next opportunities may emerge. "Most of the asset managers are sitting on tens of billions of NAV. So it lends itself to a secondary opportunity that is inevitably going to continue to grow and be of scale," Cooper said in the podcast. "I think as we look five to 10 years down the road, we are hopeful that we are going to see more specialised pockets of capital come into the space."

Over the last few years, talk of private credit’s “golden age” has grown louder, with predictions from various sources that the asset class could eventually grow to around $20-25 trillion in size from its current level of $2-3 trillion. Yet, fundraising has slowed since its peak in 2021. So was all the talk premature? Jess Larsen, founder and chief executive officer of private credit-focused placement agent Briarcliffe Credit Partners, believes that it was – but he also believes this is the year when a corner will be turned and private credit will start the journey that could see it one day become larger than private equity. In this episode, Larsen also shares his thoughts on direct lending and predicts that economy of scale will become all the more crucial, and could lead to the emergence of $100 billion evergreen mega-funds. On today’s hot topic of tariffs, he does not think signs of the investor response will start to emerge for another few months, but with volatility “the order of the day” in his words, he thinks it’s inevitable that LPs will focus on building all-weather portfolios that go well beyond the confines of direct lending.

This episode is sponsored by Rithm Capital The asset-based finance market is heating up, with a raft of private credit investors increasingly taking note of the strategy – and for good reason. Capable of delivering strong returns even in challenging macroeconomic environments due to its cashflow-oriented nature, ABF represents a rather unique offering for lenders and LPs alike. But contrary to what many might think, ABF is not a particularly new strategy. Michael Nierenberg is Chairman, Chief Executive Officer and President of Rithm Capital [https://www.rithmcap.com/about/], a global asset manager focused on real estate, credit and financial services which makes direct investments and operates several wholly-owned operating businesses. In this episode, he explains how the market has evolved over his more than 30 years in the industry. He also discusses which industries are particularly well-positioned to benefit from ABF strategies and why he believes ABF is an area in which investors are underinvested.

Growing scale is one of the big themes in private debt as a small group of mega-sized GPs expand their platforms rapidly – both building on existing strategies like direct lending and colonising new areas such as asset-based lending and specialty finance. Among the largest of these managers is Goldman Sachs Asset Management [https://www.privatedebtinvestor.com/database/institution-profile/id/institution98a4p/goldman-sachs-asset-management], one of the early pioneers of the asset class. In this edition of The Private Debt Investor Podcast, we hear from James Reynolds, global co-head of GSAM’s private credit business, about how the addressable market is growing larger still – with $10 billion club deals now within the view of direct lenders. Reynolds explains why the firm has launched a climate credit strategy, arguing there is a large supply/demand imbalance in that area. He also discusses the blurring of the public and private markets, how managers are reaching out to large new pools of investor capital, why there is room for optimism around the M&A market, and the importance of focusing on underwriting rather than being distracted by the headlines.