Traci Alloway

But think about a five-year loan, right?

You probably have 20% of your loans come and due every year.

That's 5% a quarter.

So the gates were put in there to address the fact that we have maturities every quarter that could be there to meet redemptions.

That's where some of the 5% logic came from.

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Actually, we should talk about the gates because one of the sort of defenses that you sometimes hear about private credit is this idea that, well, even if you get a spike in defaults and all these companies start failing, it's not necessarily a huge problem for private credit because we've set up these limitations on redemption.

So you can't get this rapid run for the exit because the amount of money that can be taken out of each fund is capped at, you know, 5%.

or something like that my inclination when i hear stuff like that is to think like okay well you've you've capped the amount of money that can exit the fund but that doesn't mean that you've stopped people from wanting to exit the fund it's just a slower run than it would be otherwise so you're sort of building up that pressure but then again the response to that is well you know you're giving investors time to see their marks build back up or whatever but like

Does that selling pressure go away at all?

How helpful are the gates when it comes to managing stress in private credit?

I think they're critical actually in the retail channel because you're protecting both sets of investors.

It's not the asset side of the equation.

It's not the loans that they're making that are the problem.