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Readers of The Lead Left will be familiar with our impatience for the “sky-is-falling” brand of financial industry reporting (“risky loans!”). Recent news articles have further tested us. There’s plenty of room for well-researched pieces about real risks associated with leveraged lending and sponsor buyouts. Indeed, these can be valuable by highlighting managers whose practices aren’t in line with the best performers in the business.
However, recent stories contain such a dizzying blend of inaccuracies and wild speculation, we want to highlight issues demonstrating almost willful ignorance of the role private credit plays in today’s asset management world. Or the less excusable desire to simply knock a fast-growing and popular sector.
Systemic risk! The kind of thing people throw around when they can’t identify specific concerns but want to grab headlines. Factually, direct lenders’ long-term liabilities match asset tenors. Investors are sophisticated institutions with deep experience in a variety of credit strategies, public and private. None of the leading managers are funded by customer deposits...
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