Credit Exchange with Lisa Lee

This week, a special edition of Credit Exchange. Over the last couple of weeks, host Lisa Lee has been attending the ABS East conference in Miami, and the CAIS Alternative Investment Summit in Beverly Hills, to understand the key dynamics currently unfolding in credit.

On this week’s podcast, we hear from Robert Zable, global head of CLOs at Guggenheim Partners; Jared Parker, co-head of North America at Oaktree Capital Management; and Tom Majewski, co-founder and CEO of Eagle Point Credit Management. They share their insights on inflation, artificial intelligence, and the current shape of credit markets.

“We’re in the trenches and the front lines of doing this,” says Sandor Hau, head of credit and managing partner at private equity firm Charlesbank Capital Partners, on the latest episode of Credit Exchange with Lisa Lee. Hau says he has been buying illiquid private credit loans for decades.

The buying and selling of private loans is still a niche and idiosyncratic play. But trading is accelerating as the private credit market expands in size and its liquidity needs grow. Private equity firms have the option to put certain firms into what are known as “disqualified lists”...

“Right now everything seems very elevated in the private market. So all the more, ‘stock picking’ as venture capitalists is really important,” says Eric Kim, co-founder of Goodwater Capital, on the latest episode of Credit Exchange with Lisa Lee. Goodwater is a global venture capital firm that counts no fewer than 17 ‘unicorns’ amongst its investment successes, including such storied names as TikTok (via musical.ly), Spotify, Monzo and Kakao.

M&A is hot right now, says Kim. Incumbent companies with large market caps and strong cash positions are looking to acquire to have that next AI story and are gett...

The US Federal Reserve should not be tempted to overreact as it seeks to tackle rising inflation, says Cindy Beaulieu, CIO of Conning North America, on the latest episode of Credit Exchange with Lisa Lee.

A combination of rising energy prices and the lingering after-effects of the Trump administration’s tariffs agenda mean inflation continues to be a key issue for the economy. For Beaulieu, Fed Chair Kevin Warsh’s recent speech at Jackson Hole highlighted a focus on rising core personal consumption expenditures (PCE) remaining at an elevated level, and the need to address it as a pr...

Two pools of capital – the franchising of AI digital infrastructure buildout and government spending – are interest rate-insensitive and require a massive quantum of debt, says Gregory Peters, co-chief investment officer at PGIM Credit.

Peters, who in his role oversees $1.2 trillion of assets under management, says the Federal Reserve has to hike interest rates to remain credible. But even with a few more hikes, he doesn’t see the current policy as being restrictive.

“I’m not sure It quells inflation either,” Peters says.

A slowdown of the AI buildout and capex would be a positive f...

“Interest rate markets are telling you that they really are concerned about inflation, and to a certain degree, concerned about the size of government debt,” says Symon Drake-Brockman, co-founder and managing partner at Pemberton Asset Management, on the latest episode of Credit Exchange with Lisa Lee, taped on 9 September 2026.

The re-engagement of hostilities between US and Iran has set that back in place, he adds, especially since we are moving into winter, when demand for gas and energy will increase. Drake-Brockman says US Treasury yields look quite high, but potential buyers are trying to work out whether the...

“The market clearly is saying that he (US Treasury Secretary Scott Bessent) didn’t threaten a bazooka, he didn’t bring a bazooka, and he hasn’t shown a bazooka,” says Alan Schrager, chief investment officer at Oak Hill Advisors, on the latest episode of Credit Exchange with Lisa Lee.

The US Treasury Department has the capabilities to make an impact on rising sovereign bond yields, but the world hasn’t seen a major or real commitment to buy the long end, Schrager says: “In the absence of a bazooka, it’s very hard to make too much of an impac...

“Here we are again,” reckons Kort Schnabel, co-head of US direct lending at Ares Management, on the surprising return of inflation. Still, the economy is in a good place to be able to manage through these inflationary pressures we’re seeing, Schnabel explains to Lisa Lee on the latest episode of Credit Exchange.

On artificial intelligence and disruption of software companies, Schnabel says we are “not out of the woods”. He adds, however, that there is some good news, in that “it’s not getting disrupted overnight.” Ares – an alternative asset manager with around $680 billion in AUM, and a private cred...

“The markets are recognising the risks around longer-term inflation. I think it’s recognising the ballooning deficits of governments around the world,” says Chris Wright, CEO and president of Crescent Capital Group, on the latest episode of Credit Exchange with Lisa Lee, taped on 19 August 2026.

“What you’re seeing is the repricing of long-term assets based on a recognition of a higher inflationary rate going forward,” says Wright, who helms the global alternative investment firm with over $50 billion of AUM. And the financing of growth in a more uncertain market is getting more expensive, he contends.

Wright als...

The rise in real yields because of government deficit spending, alongside ongoing huge demands for AI investment, are underpinning the rise in interest rates, says Ashok Bhatia, chief investment officer at Neuberger, an investment management firm with more than $600 billion in AUM.

Speaking with Lisa Lee on the latest episode of Credit Exchange, Bhatia says that real interest rates are the key to understanding the current bond market landscape.

“The bond market’s really relaxed about intermediate term, 5-to-10-year inflation rates. It is just telling you there is not a problem,” he says. “[But] the big...

“Whenever you have noise, that leads to more selling volume in our market – so volatility for us as secondary investors is a very good thing,” says Michael Schad, head of credit at Coller Capital, a secondaries specialist with $55 billion in AUM, on the latest episode of Credit Exchange with Lisa Lee.

Schad is positive about the overall health of private credit, describing it as a “very attractive and sound” asset class, with its rapid growth coming alongside a more recent maturing of the market.

He notes, though, that a decade is “not a very long time”, as so...

“It’s just like nothing we’ve ever seen before,” says Bryan Whalen, CIO of fixed income at $200 billion global asset manager TCW, in reference to AI’s capital spend, equity prices and momentum on the latest edition of Credit Exchange with Lisa Lee. “What we’re looking at here is just everybody on one side of the boat, too much enthusiasm,” he says.

“It just feels like it’s the beginning of the end of the euphoria.”

The AI spending spree has broken the natural feedback loop to slow down borrowing. While the bond market is raising the...

“One of the predictions I would make is that the private equity industry is in a tectonic, Darwinian moment itself,” says David Golub, co-CEO of Golub Capital, a direct lending specialist with more than $90 billion in AUM.

Speaking on the latest episode of Credit Exchange with Lisa Lee, Golub also sees a ‘Darwinian moment’ for private credit due to higher-than-usual credit stress and lower-than-expected returns.

“The winners thrive, they adapt, and they grow, and the losers, they don’t,” says Golub.

This will all lead to more consolidation in the industry, and a core group of...

Lotfi Karoui, multi-asset credit strategist at fixed-income behemoth PIMCO, says the top risk to markets and the economy is the potential unwinding of the AI capex cycle, on the latest episode of Credit Exchange with Lisa Lee.

“Then you’re going to tighten financial conditions,” says Karoui, which is bad news for equities. That will have wealth effects and probably affect the broader economy. The market isn’t blindly rewarding all capex financing announcements, he says. Right now, markets are seeing some indigestion regarding data centre financing – Karoui recommends looking at dollar versus other currency debt to see whethe...

“We certainly have noted from an oil price or fuel price perspective, just how comfortable businesses have gotten with oil price or gas price pass-throughs,” says Aaron Kless, CEO and CIO of direct lending specialist Andalusian Credit Partners, on the latest edition of Credit Exchange with Lisa Lee.

“They’ve really been able to manage that price volatility, and price spikes, quite well.”

Andalusian has a unique perspective on the macro-economic backdrop. Its executive chairman is Roger W. Ferguson, Jr., a former vice-chairman of the Federal Reserve, who also sits on its investment committee.

“Our vie...

“Last frontiers of alpha is in the sports and entertainment-related real estate,” says Jonathan Fascitelli, founder and CEO of sport and entertainment real estate firm Seregh, on a special edition of Credit Exchange with Lisa Lee, recorded at the FII Institute’s conference in Rome. Just 18 months since founding, Seregh already has more than $35 billion in their pipeline.

Seregh, which has the backing of Creative Arts Agency (CAA), Apollo co-founder Josh Harris, and Blackstone’s David Blitzer among many others, seeks to develop and invest in infrastructures around stadium and arenas. That means building communities that include resident...

“We’re clearly in late cycle, but we’re not obviously at the turning point,” says Ariadna Stefanescu, co-head of Permira Credit, in the latest edition of Credit Exchange with Lisa Lee. Permira is a global investment firm with buyout and credit businesses holding nearly €90 billion in committed capital.

The current environment provides an opportunity for different managers to differentiate themselves, says Stefanescu. Not only will there be more dispersion, but some shops will either fold or face consolidation.

“Ultimately, some people will be priced out of the market,” she predicts.

While Stefanescu expects defaul...

Middle-market direct lending finances growing businesses, says Gauthier Reymondier, head of European credit at Bain Capital, a private equity and credit powerhouse with more than $225 billion in assets under management.

Reymondier speaks about the fundamental difference between US and European economic growth, the impact of artificial intelligence and capex spending, and consumer habits. While European growth expectations have been very mediocre, more political stability would prompt consumers to spend more, he says, as has been the case in Spain, Portugal or Poland.

“Trust would be the biggest growth driver,” Reymondier says. “I think stability is import...

Issues in the software space and a looming maturity wall will result in a return to more traditional distressed opportunities, says Jeff Kivitz, chief investment officer at Canyon Partners, on the latest episode of Credit Exchange with Lisa Lee.

There’s a wall of software debt maturities looming and while in the past these have “magically gone away, I think this wall is a little bit different,” Kivitz says. Eventually, the rubber will meet the road and there will be distressed and restructuring opportunities.

Canyon, a global alternative investment manager with $30 billion in AUM, is a firm...

“We’re starting to see some impact on cost. Very manageable, but it’s hard to ignore,” says Alex Chi, deputy CIO of global credit at Carlyle, one of the world’s largest investment managers with nearly $500bn in assets under management.

Speaking on the latest episode of Credit Exchange with Lisa Lee, Chi says that they are being very careful about how they underwrite new credits going forward. But new originations and investments stand to benefit from higher interest rates, he adds, as most of Carlyle’s credit holdings are floating-rate.

While Chi says consumer spe...

The Iran war is currently in a “mushy middle”, says Marko Papic, a macro and geopolitical expert at global investment research firm BCA Research, in the latest episode of Credit Exchange with Lisa Lee.

“[What] investors really have to focus on is not the verbiage, not the rhetoric, not the negotiations – but rather, the ships going in and out of Hormuz,” says Papic. While difficult to track, Hormuz has become a permeable membrane in the past few months. Combined with high oil reserves at the onset of the war, it’s helping prevent a calamitous global recession, and allowing...

The US healthcare space is very interesting as far as real estate is concerned, says David Mihalick, co-head of global investments at Barings, a $500 billion alternative asset manager with expertise in credit, real assets and emerging markets. Mihalick points to demographic trends with an ageing population and the need for medical offices and senior housing as reasons why Barings is keen. “We think that creates a really compelling investment opportunity, and we’re looking to take advantage of that in our business.”

Mihalick, who once served as the head of private assets as well as head of US pub...

“The dispersion in performance is becoming more visible, certainly to institutional investors,” says James Reynolds, global co-head of private credit at Goldman Sachs, on the latest episode of the Credit Exchange podcast with Lisa Lee.

“It’s clear, as you travel the world and speak to LPs, that there is a flight to quality happening. There is a flight to quality and scale,” he says.

The headlines around private credit are focused mainly on BDCs, which accounts for $400bn of the asset class and is located in the US. The distribution yields have come down, Reynolds n...

“We’ve been very opportunistic about deployment in cycles or dislocations, which I think we’re in the very early innings of,” says Milwood Hobbs, Jr., deputy chief investment officer of Oaktree’s strategic credit platform, on the latest episode of Credit Exchange with Lisa Lee.

There were about USD 200bn of private credit loans inked in 2021 and 2022, when tech-related business valuations had reached all-time highs. Since then, interest rates went from zero to 5%, valuations came down, and free cash disappeared. And AI has made it more difficult to price the risk and support the businesses. These loans matu...

“Everybody’s still searching for that easy button on AI,” says David Neuenhaus, US head of asset management and private equity at KPMG, on the latest edition of the Credit Exchange podcast with Lisa Lee, taped at the conclusion of the Milken Institute Global Conference in Beverly Hills.

Neuenhaus says AI was among the hottest topics at the conference, which featured a who’s-who of the finance world, as well as former NBA star Shaquille O’Neal and football legend Tom Brady.

“There are some early adopters – some folks that have, I think, figured out ways to apply...

“We have ample liquidity,” says Dan Leiter, head of international at Blackstone Credit & Insurance, on the latest episode of Credit Exchange with Lisa Lee, as he explained the firm’s decision to honour all withdrawal requests at its private credit perpetual fund.

“[As a result] it was not an issue to honour the redemption, and we thought it was the right thing to do,” says Leiter. Competitors – some of whom capped redemptions at 5% – made assessments and opted for what was right for their vehicles. “They also have different liquidity profiles. They have different considerations,” he adds.

Leiter also addr...

Global economies are adjusting to the oil shock from the Iran war, says Juhi Dhawan, macro strategist at Wellington Management, on the latest episode of the Credit Exchange podcast with Lisa Lee – and China has shown surprising resilience that may improve its competitiveness against Europe, Japan and some other Asian countries.

Looking at the past performance of economies and markets to oil shocks, one of the surprises this time has been China, Dhawan says. It has held up better because it has reduced its reliance on oil due to its big push into renewables and coal. That’s go...

“The doomsday scenario is a complete over-exaggeration,” says David Manlowe, CEO of Benefit Street Partners, on the latest episode of Credit Exchange with Lisa Lee. Manlowe asserts that investors will have time to see the impact of artificial intelligence, which could even help boost margins at software firms.

“I don’t see a big company like, for example, Franklin Templeton, ripping out their core software system in the next couple of quarters.”

The average level of exposure is around 22-23% for BDCs, Manlowe says, but among funds, there’s huge disparity. If one drew a histogram of...

“We are going to see consumer pain, and particularly on the lower-income side of things,” says David Saitowitz, head of US liquid credit at ICG, a global alternative asset manager with $127 billion in AUM, on the latest Credit Exchange podcast with Lisa Lee.

That means certain sectors could get hurt while others do very well, he says, adding that it’s a trend he’s already seeing. Anything consumer related – whether it’s housing, travel, to apparel and retail, are under pressure.

“Those areas, I think, are all feeling a decent amount of pain, and I think they w...

Private credit firms, including Hayfin, are still willing to lend to software companies, says Marc Chowrimootoo, co-head of direct lending at alternative asset manager Hayfin, on the latest episode of the Credit Exchange podcast with Lisa Lee.

“If that call comes in, we absolutely take that call,” says Chowrimootoo, on how he responds to a request from a private equity fund for a software LBO financing. “We absolutely give it the due care and attention.”

But the willingness to partake has moderated, he adds. “Everyone is being much more judicious.”

There are a number of qu...

The current period is a “really important rite of passage” for retail access to private credit and direct lending, says Tristram Leach, head of investments Europe at Apollo Global Management, on the latest episode of Credit Exchange with Lisa Lee.

“The five percent number is there for a reason,” says Leach, speaking about recent outflows from semi-liquid private credit funds that have seen a pickup in redemption requests (some firms have given back more than the agreed 5%; some have limited at 5%).

“It’s important to protect remaining investors. It’s a level of liquidity that has been promi...

“We’ve never had more undrawn capital,” says Jonathan Dorfman, chief investment officer at Napier Park Global Capital, a $40bn alternative credit manager. Napier Park has been prepping for a repricing of financial assets that predates the Iran war and the software crisis, Dorfman said in the latest episode of Credit Exchange with Lisa Lee.

Have ready cash and take advantage to buy assets that are going to come up for sale very soon, Dorfman advises. He says credit spreads should widen further: “We are going to see more and more problems occur, and more and more bad head...

“Private markets and private credit can be very, very helpful,” says Andrew Davies, in reference to the emerging dislocations he sees in financial markets, on the latest Credit Exchange podcast with Lisa Lee. Davies is the head of credit at CVC Capital Partners, a global private markets manager with more than EUR 200bn in AUM.

That help could be in the form of helping banks that are struggling to offload underwritten debt, scooping up publicly trading debt that’s priced too low, or providing to financial sponsors who find banks pared back, Davies says.

“We’ve seen it...

“You are going to hit a little bit of a wall because of power. You’re going to hit a little bit of a wall, because of the sheer capital that’s supposed to be there to finance that piece,” says Joel Holsinger, co-head of alternative credit at Ares Management, on the latest edition of Credit Exchange with Lisa Lee.

Holsinger expects to see a slowdown, because the current level is “probably unsustainable” for the sheer amount of capital that is required for all these projects, along with the amount of power generation that needs to be built.

The investing environment has gotten hard, says Christopher Sheldon, co-head of credit and capital markets at KKR, on the latest episode of Credit Exchange with Lisa Lee. “It’s adult swim only.”

There’s a lot of uncertainty in the market, and much of the investor community is trying to figure out what playing field they’re on, explains Sheldon. He discusses KKR’s latest investor letter, titled CTRL + ALT + CREDIT, intended to reboot how investors are approaching credit.

Sheldon contends that you have to be well-versed, have scale, and create your own origination, because elevated def...

Europe has mostly missed the AI boom that’s driven a large part of US economic growth, says Mathew Cestar, president of Arini Capital Management, on the latest episode of Credit Exchange with Lisa Lee, taped in the London offices of the alternative asset manager. But that actually makes European credit more appealing, because while the intersection of technology and AI is an exciting equity story, that intersection in credit can involve “a lot of risk.”

Cestar, who was once the co-head of investment banking at a large global bank, expects to see a broadening of M&A deal...

“We have this great tool out there called AI, and we haven’t 100% figured out how to implement it yet,” says Mark Jenkins, co-president and head of global credit & insurance at Carlyle, on the latest edition of ‘Credit Exchange with Lisa Lee’. Jenkins predicts that the next stage is going to be how corporates implement AI into their workflows, and that the process is “really in the first innings of implement”.

OpenAI, Anthropic, and many others are developing tools for workflow, and Jenkins predicts they will take “not years, but several months” to impact systems. Carlyle, for example, is alread...

“Whether it be in the high yield bond market or in the leveraged loan market, even the hint or threat of AI impeding on really any sector – you see pretty significant downside,” says Mitch Garfin, co-head of leveraged finance at the world’s largest asset manager BlackRock, on the latest episode of Credit Exchange with Lisa Lee.

Garfin is constructive on the market generally, with growth continuing to “chug along” and inflation currently well-contained. He also identifies significant opportunities from AI, including ongoing data centre build-outs contributing to a significant uptick in supply in the high yield market that...

“It’s going to be a slow build, and we think a sustained multi-year increase in activity,” says David Miller, head of private credit and equity at Morgan Stanley Investment Management, on the latest episode of Credit Exchange with Lisa Lee, speaking about M&A and LBOs.

The geopolitical headlines haven’t yet changed the economic picture, says Miller. But over time, they may impact on confidence and fan uncertainty.

“As uncertainty rises, risk premium will rise. So that can change the calculus - but we’re not seeing it in the markets yet,” he observes.

R.J. Gallo, deputy CIO of fixed income at Federated Hermes, addresses the recent DOJ move to investigate Federal Reserve chairman Jerome Powell and the possible impact on monetary policy, on the latest episode of ‘Credit Exchange with Lisa Lee’.

Gallo, who will take up the fixed income CIO role in May, says we might see a more divergent FOMC where the votes actually matter.

“Does that make them more hawkish? I don’t know. I’ll tell you this. It certainly won’t make the hawks more dovish,” he says.

“It’s important to reali...