Hunter Hopcroft
speaker
537 appearances
1 recordings
1 series
first heard Mar 2025
last heard Mar 2025
Hunter Hopcroft’s voice in public audio — every appearance, attributed to the second.
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It's just a slow degradation of returns as debt eats more and more of the benefits of asset ownership or the activities of these businesses.
Well again, private credit is not now nor has it ever made a
cost of capital argument for itself.
It's made an argument for itself on the basis of
a one-to-one lender-borrower relationship and an ability to be creative.
And I think that's continuing, especially as some of these companies need a creative solution.
Core Weave again is a great example of this about lending against GPUs for a business that probably would not have checked many other credit boxes on its own.
It's worth noting this interaction with the banking system, though, because while banks have largely been forced out of a lot of these higher octane lending relationships, they're still very much providing back leverage to private credit funds and to the Apollo's of the world.
So they found a way, I mean they've explicitly found a way through things like synthetic risk transfers and things like that.
But banks have found a way to coexist.
with private credit and with this private capital lending market in a way that probably raises some additional regulatory questions, but
they've fallen into symbiosis, not necessarily into competition.
Well there's certainly
a framework that was established up to today and these have
typically traded on a multiple of fee-related earnings.
For these companies, earnings per share is pretty noisy.
And fee-related earnings, a multiple, the market cap, a multiple on how much they were earning from fees, was the way the market was pricing their growth and assets.
And
the biggest driver of their growth in assets was their perceived ability to fundraise new and larger funds.
There was some degree to which it was the carry that was accruing from performance, but for most part those multiples were a projection of future fundraising ability.
Showing 461–480 of 537 · page 24 of 27
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