Why Software Valuation Drops Threaten Equity, Not Private Credit
Software buyout debt holds an equity cushion averaging 13 to 14 turns of EBITDA, protecting direct lenders against severe enterprise value drops.
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Private credit: what the top podcasts are saying.
Lending outside the banks: who does it, on what terms, and where it can break. 9 write-ups from 4 shows so far, the newest from September 2026.
9 write-ups4 shows
The short version
Institutional allocators continue pouring capital into private credit as traditional banks retreat from middle-market lending. The largest platforms use their scale to dictate terms on premium deals and avoid the adverse selection facing smaller competitors.
Top talking points
Bank regulations created a void for institutional allocators
Commercial bank retrenchment after regulatory shifts forced traditional lenders out of middle-market loans. Pension funds and allocators quickly filled this gap to find yield outside standard fixed-income products.
- Stuart Waugh: Retail BDC Noise Obscures Institutional Credit How I Invest · Aug 30
- Australia's Private Credit: Not Just Sponsor-Backed Debt Capital Allocators · Jul 19
Top platforms use scale to secure pricing power
Private equity sponsors running billion-dollar buyouts call just a few top direct lenders. This scale allows large platforms to set terms, while newer entrants underwrite the deals they reject.
- Why Direct Lending Faces Severe Adverse Selection Dry Powder · Sep 13
- Why Scale Builds an Unfair Moat in Private Credit Dry Powder · Sep 13
Loan portfolios show strong protection against valuation drops
Software buyout debt holds an equity cushion of 13 to 14 turns of EBITDA. Kipp deVeer states borrower earnings expand consistently, keeping default rates below historical averages.
- Why Software Valuation Drops Threaten Equity, Not Private Credit Dry Powder · Sep 13
- Ares Co-President Kipp deVeer on Private Credit Headwinds Dry Powder · Sep 13
Most interesting insights
Institutional pension funds currently allocate 8% to 15% of their capital to private equity, while retail investors sit between 0% and 1%.
From Why Private Equity Cannot Scale Like Private Credit, How I Invest · Sep 13
Ares Management avoided tech borrowers vulnerable to artificial intelligence displacement during initial investment committee screening.
From Why Software Valuation Drops Threaten Equity, Not Private Credit, Dry Powder · Sep 13
Smaller and newer private credit entrants face severe adverse selection by underwriting the transactions rejected by the top five platforms.
From Why Direct Lending Faces Severe Adverse Selection, Dry Powder · Sep 13
Unlike the global norm where private credit is nearly synonymous with sponsor-backed direct lending, the Australian market encompasses a far broader definition, with MA Financial Group's book reflecting 60% asset-backed facilities and 20% direct asset lending.
From Australia's Private Credit: Not Just Sponsor-Backed Debt, Capital Allocators · Jul 19
Latest write-ups
Why Private Equity Cannot Scale Like Private Credit
Institutional pension funds currently allocate 8% to 15% of their capital to private equity, while retail investors sit between 0% and 1%.
Ares Co-President Kipp deVeer on Private Credit Headwinds
Ares Management Co-President Kipp deVeer reports that direct loan portfolio performance contradicts public skepticism, with default rates and non-accruals tracking well below historical averages.
Why Scale Builds an Unfair Moat in Private Credit
Scale functions differently in private debt than in public equities; larger platforms gain direct pricing power, execution certainty, and proprietary market intelligence.
Why Direct Lending Faces Severe Adverse Selection
Private equity sponsors funding billion-dollar buyouts do not run broad syndication processes; they call two or three scaled direct lenders directly.
Stuart Waugh: Retail BDC Noise Obscures Institutional Credit
Retail Business Development Companies (BDCs) face headlines about redemption pressure and shifting sentiment, but Waugh notes BDCs represent only a small fraction of the wider private credit market.
Ares' Joel: Private Credit Reputation Trumps Transactional Wins
Ares investor Joel argues that in private, illiquid credit markets, sustained deal flow and better risk profiles stem from a firm's consistent reputation for delivering on commitments, not just optimizing individual transactions.
Brazil's Hidden Alpha: Distressed PE, Niobium, and Precatórios
Brazil's agricultural footprint for staples like soy is 50% larger than the US, with 120 million hectares planted, signaling a massive, often overlooked, production base.
Australia's Private Credit: Not Just Sponsor-Backed Debt
Australia's private credit market evolved distinctively post-GFC, driven by stringent bank regulations that forced the historically dominant “big four banks” (controlling 80% of lending) to retreat from various lending areas.