Welcome back to the Alt Goes Mainstream podcast.

We were live from AGM’s RIA Field Trip at Brookfield’s New York office at Brookfield Place with Oaktree Managing Director and Co-Portfolio Manager Danielle Poli to unpack why private credit is at a crossroads and why dispersion is growing.

Danielle has a unique perch to form a developed view on the current state of private credit. She sits at the intersection of public and private credit, providing her with perspectives on where opportunities and risks lie across the liquidity spectrum.

Danielle is a founding member of Oaktree’s Global Credit strategy and its Investment Committee, which was established in 2017. She’s been an important contributor to its growth into a scaled multi-asset credit platform. She previously led Oaktree’s product specialist group, which she helped build into a global team supporting credit, private equity, and real estate. She joined Oaktree in 201 and has nearly two decades of experience in private markets. She has been named to Barron’s list of the 100 Most Influential Women in U.S. Finance.

Danielle and I had a fascinating conversation about the current state of private credit, where cracks might be emerging and where to find pockets of opportunity amid the dislocations. We covered:

Why is boring beautiful in private credit?

Where are we in the credit cycle?

Why it’s important to have a contrarian mindset.

Where, why, and how dispersion is rising in credit.

How to underwrite software investments post-AI.

Why asset-backed finance can be a diversifier.

Why now could be the time to prepare for opportunistic and rescue lending opportunities, as maturities are fast approaching.

How to balance public and private credit investing.

Thanks, Danielle, for sharing your wisdom, expertise, and passion about private credit.

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A word from AGM podcast sponsor, Ultimus Fund Solutions

This episode of Alt Goes Mainstream is brought to you by Ultimus, the full-service fund administrator and transfer agent powering asset managers in private and public markets. As alts go mainstream, you need real expertise to handle complex fund structures, connect with key distribution partners, and handle sophisticated compliance, reporting, and transparency demands.

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We thank Ultimus for their support of alts going mainstream.

Show Notes

00:00 Live Podcast Intro

00:17 Contrarian Mindset

00:34 Intro to our Sponsor, Ultimus Fund Solutions

01:51 Where Private Credit Stands Today

02:13 Market Testing And Bifurcation

02:34 Private Credit Evolves Beyond Corporate

03:33 Danielle Poli Background

04:23 Why Liquidity Matters Now

04:49 Dislocation And Price Discovery

04:59 Structuring Power In Private Markets

05:22 Risk Return And Spread Compression

05:51 Paid For Illiquidity Plus Covenants

06:16 Asset-Backed Finance Diversifier

06:52 Corporate Vs Asset-Backed Underwriting

07:20 Why Ring-Fenced Cash Flows Win

07:51 How Allocators Fund ABF

08:11 Credit Taking Share From Equities

09:12 Tough Direct Lending Vintages

09:49 Rates Shock And Leverage Reality

10:10 AI Disrupts Software Credit

11:09 Oaktree Underweight Software

12:32 Underwriting Software Post AI

13:31 Inside The Investment Committee

14:35 Selling Rallies And Staying Humble

15:07 Busted Converts Playbook

15:55 Liquid Credit Helps Private Discipline

17:07 Why Do Both Public And Private

17:40 Transparency And Extend or Pretend

18:58 PIK Interest Red Flags

19:58 Stress Under The Surface

20:14 Triple C Spreads And Maturity Wall

21:27 Why Dispersion Is Rising

21:55 Risk Migrates To Loans And Private

23:00 Oaktree Contrarian Playbook

23:22 Complacency Vs Real Tailwinds

24:34 Brookfield Platform AI Insights

25:40 Exuberant Financing Warning Signs

26:28 Equity Vs Credit For AI Buildout

27:10 Allocating Between Equity And Credit

27:52 Valuations Signal Lower Equity Returns

29:14 What CIOs Should Tell Clients

30:00 Rescue Lending Opportunity Ahead

31:39 Signals And Timing The Cycle

32:04 Hybrid Products And Barbell Allocations

32:36 Core Income Plus ABF Deals

33:06 Memo Title - Boring Is Beautiful

34:30 Closing Thanks And Outro

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