Andrew Milgram

They're no longer lenders at that point.

They're taking massive amounts of equity risk.

In companies that are probably, again, they exist mostly in that middle market space.

So they're under pressure.

They start from a more difficult position with declining margins, declining earnings power.

It's not a great setup.

I don't see great things ahead for large portions of the private credit market.

That being said, there are some private credit firms that are spectacular.

I mean, superior.

That list is pretty straightforward.

Firms like Aries or let's say Golub are spectacular.

stellar at what they do.

And they have great credit cultures.

They have really complete teams that deal with underwriting and workouts should they get to that.

The private credit universe used to be a direct origination business.

There is some direct origination that goes on in private credit today, but it's largely a brokered market, which is a dirty little secret people don't like to talk about.

The Houlihans or the Lincolns are doing a huge amount of placement of private credit.

So naturally, what are they doing?

They're going to the biggest, best, most well-known lenders first.

Aries, Golub, et cetera.