US Private Credit Managers See Resilience Amid Market Volatility

Brianne Ptacek, Managing Director and Head of Deal Execution for North America at Barings; Drew Guyette, Chief Credit Officer and Senior Partner at TPG Twinbrook; and Jonathan Pearl, Head of Originations for Lord Abbott's private credit platform discussed the evolution and current state of private credit markets, highlighting the asset class's resilience through various market cycles and its growing accessibility to different investor types.

Private credit industry leaders convened to discuss the asset class's remarkable evolution and future prospects, with executives from major players Barings, TPG Twinbrook, and Lord Abbott sharing insights on market resilience and growth opportunities. The discussion centered on how private credit has matured from an emerging alternative to a mainstream asset class, demonstrating durability through multiple crisis periods while attracting unprecedented investor interest across retail, institutional, and high net worth segments. The executives explored structural market developments including expanded research coverage, innovative vehicle formations, and the strategic advantages created by current market volatility for experienced managers in the core middle market space.

Key Highlights:

• Proven resilience through multiple crises validates asset class durability: Multiple speakers emphasized private credit's ability to withstand significant challenges since 2020, including the pandemic, geopolitical uncertainty, inflation, and supply chain disruptions. The majority of portfolios have remained resilient through this volatility. Underlying borrowers have demonstrated EBITDA and revenue growth and healthy balance sheets, and sponsors have been consistent in providing support to portfolio companies.
• Crisis periods create differentiation opportunities for experienced managers: Both Ptacek and Guyette highlighted how volatility and uncertain periods like the GFC and COVID pandemic allow disciplined managers with time-tested playbooks and cycle experience to differentiate themselves and gain market share through superior portfolio management capabilities, diversification, and scale.
• Proliferation of research coverage and vehicle structures expanding market access: Guyette and Pearl noted the increased analytical coverage and research helping investors understand market nuances, while new vehicle structures beyond traditional drawdown funds – including perennial structures at institutional and retail levels – are making private credit more accessible to diverse investor types.
• Growing investor demand across multiple segments driving market expansion: Pearl specifically highlighted expanded demand from under-allocated retail and high net worth investors gaining access through new vehicles like private BDCs. In addition, institutional growth, particularly among insurers, is being driven by investment structures designed for the specific needs of investors.
• Market volatility creating opportunities in core mid-market: Pearl identified opportunities arising from public market shutdowns during volatile periods, helping liquid borrowers access private capital, while other direct lenders moving up-market creates white space in the core mid-market where dedicated lenders can deploy capital effectively into stable businesses.