Welcome back to the Alt Goes Mainstream podcast.
We were live from AGM’s RIA Field Trip at Brookfield’s New York office at Brookfield Place with Oaktree Managing Director and Co-Portfolio Manager Danielle Poli to unpack why private credit is at a crossroads and why dispersion is growing.
Danielle has a unique perch to form a developed view on the current state of private credit. She sits at the intersection of public and private credit, providing her with perspectives on where opportunities and risks lie across the liquidity spectrum.
Danielle is a founding member of Oaktree’s Global Credit strategy and its Investment Committee, which was established in 2017. She’s been an important contributor to its growth into a scaled multi-asset credit platform. She previously led Oaktree’s product specialist group, which she helped build into a global team supporting credit, private equity, and real estate. She joined Oaktree in 201 and has nearly two decades of experience in private markets. She has been named to Barron’s list of the 100 Most Influential Women in U.S. Finance.
Danielle and I had a fascinating conversation about the current state of private credit, where cracks might be emerging and where to find pockets of opportunity amid the dislocations. We covered:
Why is boring beautiful in private credit?
Where are we in the credit cycle?
Why it’s important to have a contrarian mindset.
Where, why, and how dispersion is rising in credit.
How to underwrite software investments post-AI.
Why asset-backed finance can be a diversifier.
Why now could be the time to prepare for opportunistic and rescue lending opportunities, as maturities are fast approaching.
How to balance public and private credit investing.
Thanks, Danielle, for sharing your wisdom, expertise, and passion about private credit.
A word from AGM podcast sponsor, Ultimus Fund Solutions
This episode of Alt Goes Mainstream is brought to you by Ultimus, the full-service fund administrator and transfer agent powering asset managers in private and public markets. As alts go mainstream, you need real expertise to handle complex fund structures, connect with key distribution partners, and handle sophisticated compliance, reporting, and transparency demands.
That’s Ultimus: high-tech, high-touch solutions for over 450 clients and 2,500 funds with $775B in assets under administration. Backed by an expert team of over 1,200 employees, they place client service at the core of their business, helping you navigate complexity during your fund structuring or launch and then supporting you through every stage of growth. Whether you’re already in the market or thinking about entering private wealth, you can trust their team’s deep expertise in retail alternatives to help you reach your goals.
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We thank Ultimus for their support of alts going mainstream.
Show Notes
00:00 Live Podcast Intro
00:17 Contrarian Mindset
00:34 Intro to our Sponsor, Ultimus Fund Solutions
01:51 Where Private Credit Stands Today
02:13 Market Testing And Bifurcation
02:34 Private Credit Evolves Beyond Corporate
03:33 Danielle Poli Background
04:23 Why Liquidity Matters Now
04:49 Dislocation And Price Discovery
04:59 Structuring Power In Private Markets
05:22 Risk Return And Spread Compression
05:51 Paid For Illiquidity Plus Covenants
06:16 Asset-Backed Finance Diversifier
06:52 Corporate Vs Asset-Backed Underwriting
07:20 Why Ring-Fenced Cash Flows Win
07:51 How Allocators Fund ABF
08:11 Credit Taking Share From Equities
09:12 Tough Direct Lending Vintages
09:49 Rates Shock And Leverage Reality
10:10 AI Disrupts Software Credit
11:09 Oaktree Underweight Software
12:32 Underwriting Software Post AI
13:31 Inside The Investment Committee
14:35 Selling Rallies And Staying Humble
15:07 Busted Converts Playbook
15:55 Liquid Credit Helps Private Discipline
17:07 Why Do Both Public And Private
17:40 Transparency And Extend or Pretend
18:58 PIK Interest Red Flags
19:58 Stress Under The Surface
20:14 Triple C Spreads And Maturity Wall
21:27 Why Dispersion Is Rising
21:55 Risk Migrates To Loans And Private
23:00 Oaktree Contrarian Playbook
23:22 Complacency Vs Real Tailwinds
24:34 Brookfield Platform AI Insights
25:40 Exuberant Financing Warning Signs
26:28 Equity Vs Credit For AI Buildout
27:10 Allocating Between Equity And Credit
27:52 Valuations Signal Lower Equity Returns
29:14 What CIOs Should Tell Clients
30:00 Rescue Lending Opportunity Ahead
31:39 Signals And Timing The Cycle
32:04 Hybrid Products And Barbell Allocations
32:36 Core Income Plus ABF Deals
33:06 Memo Title - Boring Is Beautiful
34:30 Closing Thanks And Outro
Disclaimer: Alt Goes Mainstream is an independent podcast and newsletter focused on the private markets industry. It is published for informational and educational purposes only and does not constitute investment advice, financial advice, legal advice, or any other form of professional advice. Nothing contained herein should be construed as a recommendation to buy, sell, or hold any security or investment product. Some companies, individuals, or organizations featured or mentioned in this newsletter may be current or past sponsors of Alt Goes Mainstream. Sponsorship does not influence editorial coverage, but readers should be aware that a relationship might exist. The author may hold direct or indirect investments in companies, funds, or other entities mentioned in this podcast or newsletter.
