Private Credit Is Not Created Equal - Family Offices Debate the Risk

0:03You know, they're lending people money at 15 % and I'm not sure how much due diligence. It's impossible to do all the due diligence on the companies that they've owned. In this episode, we learned that private credit is not created equal. Let's run through hot takes on private credit by family offices. I think one of the problems I've had is that private credit has gone in and, you know, they're lending people money at 15 percent and I'm not sure how much due diligence. It's impossible to do all the due diligence on the companies that, you know, that they've owned. So, you know, I think it's probably much better now to look at the public markets than the private markets.

0:48Because if you look at a Blue Owl, which has been a significant investor in private credit, their stock has gone down 50%. and I'd rather own their stock at$10 when it was$20 at a discount than try to pay a premium to buy the same private companies that they're lending to. When there are a lot of people that approach us and say, hey, do you want to do private credit? Would you like to get into some private deals? I say, I'm sorry, because the principal, they are back there in Asia. They will never understand what we're doing here, So better just stick with secondary market or big brands like Anthropic or SpaceX, right?

1:31I think just a quick comment on private credit because our family office, that's predominantly what we do. It's not created equal. And I think to Jody and Shirley's points here is if anyone is really thinking of where the market is and where private credit is going today, I think there's a lot of misconceptions and there's a lot of misinformation being circulated around private credit. So with that, there are multiple segments within that market that people continue to allocate to. Our family office is probably 60 % allocated in private credit, but we're very focused on our niche and what we can underwrite and are comfortable with from a risk perspective.

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