Theodore L. Koenig

Private Credit Cashing In | Milken Institute Global Conference 2024

Liz Hoffman, Dianna Carr-Coletta, David Geenberg, Theodore L. Koenig, Danielle Poli, James Reynolds, Ted, Francois Chollette

Private credit assets have expanded to an estimated $1.5 trillion through a 20% CAGR since the financial crisis, driven by institutional reallocations from 1-2% to 15% and expanding participation from retail investors. While competition intensifies among originators targeting the lower-middle market and specialized sectors like life sciences, the sector differentiates itself through superior recovery rates via maintenance covenants and a strategic pivot toward capital protection rather than yield maximization. Looking forward, the industry faces liquidity and regulatory headwinds but expects to sustain 10-11% unlevered returns by diversifying into asset-backed finance and addressing distressed capital structures created by the current M&A slowdown.