Mary Katherine DuBose

New Horizons: The Evolution of Direct Lending and Illiquid Credit

Staci Warden, Michael Arougheti, Mary Katherine DuBose, Damien Dwin, Nino Fanlo, Terry Harris, Mike Garaghetti, Mary Catherine Dubois

Representatives from Ares Management, Wells Fargo, Brightwood Capital, SoFi, and Barings convened to analyze the maturation of the private credit market, defining direct lending as a global asset class spanning from family-owned businesses to PE-backed corporations. Panelists highlighted divergent strategies across the sector, including asset-backed senior financing, supply-demand imbalances for underserved founders, and disintermediation of super-prime consumers, while noting strong credit fundamentals despite a late-cycle environment. As regulatory frameworks evolve and fee compression accelerates, the industry faces a shift toward market efficiency where relationship premiums erode and liquidity managers prioritize rational relative value decisions over concentrated sponsor reliance.