A private credit “hot take” I don’t see anyone talk about

Private credit has been a massive revenue engine for managers who raised early and scaled.

It’s also been a massive headache for a different group of managers:

Large public fixed income shops that watched assets walk out the door as allocators carved private credit out of their bond sleeves.

Now look at who’s loudest about “private credit doom”:

• Big public bond managers losing flows
• Banks whose business depends on the syndicated loan (BSL) market

The bias is obvious.

So for those fixated on whatever the latest comment Jamie Dimon has made:

Who cares what he says?!

The syndicated loan market that competes directly with private credit is a major profit center for his bank.

He is not a neutral observer.

Here are some unbiased facts:

• Direct lending should average ~ 200 defaults per year
• Public BDC discounts are not a reliable predictor of forward returns
• Private credit is delivering ~ 200bps of excess spread over leveraged loans

If you’re going to have a strong opinion on private credit, make sure it’s not just someone else’s incentive structure talking.