NEPC’s Head of Private Debt, Oliver Fadly, speaks on private credit and how there’s less room for smaller firms as the money goes down. View the article on Bloomberg’s site here.
The clubby world of private credit seems to be running out of space for the little guy.
As the rush of money into Wall Street’s hottest market slows, life is getting especially hard for firms that already oversee a smaller amount of capital.
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“An LP looking to put $400 million to work has already cut out all of the smaller managers,” said Oliver Fadly, head of private debt at NEPC, a consultant to limited partners. “Big check investors that have already allocated to larger firms are now looking at the second wave of mega-cap lenders, not newer, smaller ones.”
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“The larger managers attract more capital as they have more infrastructure to protect their investments if things go sideways,” said Fadly at NEPC. “Smaller managers might only have one restructuring person that doesn’t have the scar tissue from prior cycles.”