AI, energy transition, M&A will fuel private credit demand

A group of senior investors and advisers joined Axios moderators for a private credit roundtable ahead of the Axios BFD conference in New York on Tuesday.

What they're saying: The hourlong discussion featured a range of views and insights on the growth and innovation of private credit, and the challenges of lending in a market where deal flow is historically low.

• Asset-backed loans, banks vs. direct lenders, GP-LP dynamics, and private credit's potential move into the public domain all featured in the conversation.
• Below is a quick snapshot of views shared by the 18 speakers at the roundtable.

Private credit is supporting capital-intensive transitions.

• "I think the demand for capital to finance this transition around AI and energy transition, that the amount of capital that's required ... that's just the big tip of the iceberg," said Goldman Sachs' Christina Minnis, global head of acquisition finance.
• "There's a voracious need for capital to get our economy through this AI transition and the need for energy and everything we're reading about data centers, etc.," Minnis added.

Companies large and small have access to a range of products.

• "There's an economy of these up-and-coming origination businesses ... that don't have enough track record to get money-center-bank money or they have some structural issue with the product that they're originating that doesn't allow them to get a rating from the ratings agency yet," CoVenture partner Brian Harwitt said.
• "We're looking at things that are way pre-ratings ... finding new payment streams that are fragmented, that are not large enough for any kind of investment grade or securitized financing and figuring out creative ways to provide solutions to those companies and rights holders," said Josh Harlan, managing partner at Harlan Capital Partners.