Tom Bilyeu

But the banks got regulated out of that business.

So now they go to a private credit fund.

The private credit fund writes the loan, but it doesn't use its own money.

It has to raise capital from somewhere

So it goes to pension funds, insurance companies, endowments, and sovereign wealth funds.

That's the traditional investor base.

It's sophisticated.

They have long time horizons.

They understand what they're actually buying.

But that wasn't enough capital to feed a market that was growing this fast.

So the funds created a new product, semi-liquid vehicles marketed directly to retail investors.

Everyday people with 401ks looking for yield in a world where savings accounts were just paying nothing.

These are the funds like Blue Owl, the ones that promise quarterly access to your money while holding loans that don't mature for five to seven years.

And now with last August executive order, the door is just wide open for people with 401ks to get involved in this asset class.

$13 trillion in defined contribution retirement savings.

The single largest pool of retail money in the world is being invited to the table.

So follow the chain.

A private equity firm loads debt onto a company.

A private credit fund writes that loan and packages it.

The fund sells shares to a pension fund who sells retirement promises to a teacher in Ohio.