Traci Alloway

They were financing aircraft engines.

They were financing

the purchase of MRIs and other healthcare equipment.

And they were extraordinarily successful and really largely responsible for a big chunk of the profits that came in underneath the GE umbrella for many years.

But what it did is it created a large body of really experienced lenders who ultimately splintered off and went into different areas in the businesses.

And one of the businesses that started from them was a company called Heller Financial, which

had been around for a while, but they hired some GE Capital guys to come in.

And they really kind of took the original Heller business, which was financing yellow equipment and rail cars and things, into the middle market LBO space.

So they became critical providers of financing for that space at a time when there really weren't many away from the bank.

So

A lot of this has been around for a long time.

People just forget about it because there's not as many people out there that are as old as we are that remember those guys from the 80s and 90s.

You saw that with a lot of the consolidation of the financial institutions.

So away from GE, CIT was a big lender in that space.

Even in the aircraft lending space, an organization, ILFC, was owned by AIG.

And the regulators wanted that highly levered, riskier financing out of the systematically important financial institutions.

Right.

Well, speaking of people not realizing some of the history here, it took me an embarrassingly long amount of time to realize that all the stories that I'd written about shadow banking in the aftermath of the 2008 financial crisis were basically private credit.

So one of the places it went was in an area of mezzanine finance.

And again, back in the early days of the LBO market, the sponsors were always looking for ways, how do we fill in the gaps?