Dr. Alan O'Sullivan

You don't know what the terms are.

You're unsure of the credit quality of the borrowers, et cetera, et cetera, and who owns a lot of these loans.

So the situation is that everything was going fine.

The sector had grown enormously post the pandemic.

The most famous example of this was the firm Blue Owl, which has numbered these private credit funds.

Assets under management grew from 50 billion to 300 billion in four to five years.

So phenomenal growth and anything that grows that quickly is always going to be concerns about.

you know, underwriting quality, loan quality, that type of thing.

So the situation is that there was claims on redemption claims were basically

investors wanted their funds back.

And given the scale and quantity of the claims, a lot of these companies started to put gates or redemptions, moratoriums on client funds.

Now, this is the oldest story in markets.

If investors require compensation above the risk-free rate, there's a trade-off.

The trade-off is going to be

Perhaps liquidity.

Maybe you can't get all your money out when you want.

Also, you have to realize that most of the some of these investors, sophisticated investors, institutional type investors, they're going into this stuff with their eyes wide open.

The problem was, from my reading of the situation, this expanded out into more retail investors.

that's a bit more flighty, a bit more nervous.

If there is a stressed environment, which we had with the energy crisis, in a crisis, you don't sell what you want, you sell what you can.