Podcast Summary

Podcast: Exchanges

Host: Goldman Sachs
Episode: ‘Who’s the Next Winner?’: Diameter Capital’s Scott Goodwin
Date: December 18, 2025

Overview

In this engaging episode, Michael Brammeier, CIO and Global Head of the External Investing Group at Goldman Sachs Asset Management, interviews Scott Goodwin, co-founder and Managing Partner of Diameter Capital Partners. Their conversation explores the evolving global credit landscape, the nuanced art of credit investing, Diameter’s investment philosophy, the firm’s origin story, and how personal passions like sports intersect with finance. The discussion is lively, candid, and provides unique insight into where sophisticated credit investors see risk, opportunity, and transformation—especially in light of AI and shifting market cycles.

Key Discussion Points and Insights

The State of the Credit Markets

[01:14–04:57]

• Consumer Credit Stress: While headline data implies US consumers are relatively healthy—with large bank data showing moderate increases in credit balances—Scott flags the growing risk in non-traditional consumer lending (e.g., Upstart, SoFi), much of it now on insurance company balance sheets or in ABS structures and not captured in mainstream stats.
  • "How levered is the consumer? We know what the spending is, but how levered is the consumer is a question we’re really focused on." [02:52, Scott Goodwin]
• Housing Market: US housing is described as “bouncing along at a really low level” due to post-pandemic inflation shocks, presenting both stress and possible coming opportunity if policy changes unlock capital flows.
• Sector-Specific Stress: Obesity Drugs: Scott notes that the success of GLP-1 drugs (like Ozempic) is causing unexpected declines in sectors such as food and beverage packaging—companies once seen as ultra-safe.
  • "All of a sudden there's a secular problem in that sector." [04:20, Scott Goodwin]

Investment Process & Sourcing Unique Opportunities

[04:57–07:55]

• Fundamental, Research-Driven Approach: Differentiates Diameter from index-hugging, ratings-focused peers; instead, they treat credit much like equity long-short—anticipating what sector and security shifts might mean over varying horizons.
• The Twitter (X) Deal Example: Showcases how Diameter’s deep industry relationships and data-driven research led to acquiring undervalued Twitter debt as banks looked to offload it.
  • "We believe in being very transparent with our bank partners...we share our research with them. We try to make them smarter, help them win deals and in this situation we were trying to make them smarter on X and I think that helped to win the transaction." [07:40, Scott Goodwin]

Navigating Tech & AI-Driven Market Shifts

[07:55–15:46]

• AI’s Impact Across Sectors: While AI infrastructure plays grab headlines, Scott emphasizes big winners in commercial fiber and spectrum (critical infrastructure for expanding AI applications).

  • "If commercial fiber is going to be a winner, Spectrum is probably going to be a winner too...we made a big bet on a satellite company that was the largest owner of Spectrum in the US outside of the big telecom providers." [09:46, Scott Goodwin]

• Chip Lending and Valuation Risks: A new opportunity set but with deep caution; senior lending on chip financing is attractive, but taking “residual risk” on chip values far into the future is deemed very speculative.

  • "None of them have a clue...so I don’t understand making a multibillion dollar bet on that. That seems crazy to me." [11:29, Scott Goodwin]

• Software/SaaS Market Risks in the Age of AI: SaaS lending has become a massive part of the private credit and Lev Fin markets, but Diameter is wary, especially of pre-ChatGPT LBOs with high leverage and less nimble business models.

  • "The SaaS companies that got LBO’d pre Covid...weren’t necessarily the S&P 500 largest SaaS companies...when these things start to go bad, it’s not like you have oil in the ground. That cash flow scheme goes away." [16:00, Scott Goodwin]
  • On portfolio construction pitfalls: "One third of your portfolio in one sector…in credit, that’s horrendous." [15:20, Scott Goodwin]

• Analogy with Oil & Gas: AI’s effect on software likened to the shale boom and bust—when cycles turn, correlated sector sell-offs create acute opportunities for those with sector knowledge and research depth.

The Diameter Capital Story

[18:10–20:41]

• Origin and Evolution: Scott and his partner John Lewinson met at Anchorage, developed complementary skills (business vs. liability side), and built Diameter Capital in 2017, supported early by Goldman Sachs.
  • "We would go and have breakfast with our sons and talk about credit…he said to me, ‘I think we should start a business together.’" [19:01, Scott Goodwin]
• Support Networks: Early and ongoing close partnerships with key figures at Goldman Sachs, underscoring the value of strong industry networks.
  • "We owe a lot to Goldman as a firm, as a true partnership. I say that in the most sincere sense of the word." [20:41, Scott Goodwin]

Personal Passions, Sports, and Investment Mindset

[21:03–28:34]

• Fantasy Baseball as Investment Training: Scott credits childhood fantasy baseball with developing his analytical and statistical edge, leading to early networking with finance professionals by age twelve.
  • "We thought you’d get out of class, you’d call us. They didn’t realize I was that young." [23:42, Scott Goodwin]
• Supporting US Soccer’s World Cup Bid: Scott is actively involved (including fundraising) in supporting Team USA’s move to hire a world-class coach ahead of the 2026 World Cup.
  • "The World Cups here, in my lifetime, at least it was 1994. Now it’s going to be here in 2026…because of my kids, because my love of sport, passionate about soccer, football growing in this country…" [27:10, Scott Goodwin]

Notable Quotes & Memorable Moments

• On Market Contradictions:
  • "What we see is...the online consumer lending, the upstarts, the SoFi, these are huge companies now that's grown by 700% in the past five years...they're not showing up in the credit data in some cases." [02:51, Scott Goodwin]
• On AI’s Disruptive Power:
  • "We like to talk a lot about micro cycles...this is a super duper micro cycle that will outlast many investing careers." [08:16, Scott Goodwin]
• On Portfolio Construction Dangers:
  • "In credit that’s horrendous. Portfolio construction in equity, I get it...in credit...I think it’s almost criminal." [15:20, Scott Goodwin]
• On Fast Decision-Making:
  • "I’m a fast seller. Like when something’s changing in a position, when it doesn’t smell right in our liquid tradable products, we get out quickly." [29:42, Scott Goodwin]
• On Risk in Lending to Software Companies:
  • "When these things start to go bad, it’s not like you have oil in the ground. That cash flow scheme goes away." [16:00, Scott Goodwin]
• On Personal Philosophy (on leaving Anchorage):
  • "You’re going to be better working for yourself where you can really dictate and set a tempo...you want transparency, you’re not going to have any friction." [30:21, Scott Goodwin]
• On the 2026 World Cup:
  • "I think the World cup is something to be really excited about...in 2026, I think the two most interesting things in the U.S. are World cup...and AI adoption and winners and losers." [30:38, Scott Goodwin]

Timeline of Important Segments

| Timestamp | Segment Description | |------------|--------------------------------------------------------------------| | 01:14-04:57| Credit market stress: consumer leverage, housing, sector shifts | | 05:26-07:55| Twitter/X deal: data-driven sourcing, execution via relationships | | 08:16-15:46| AI, tech, infrastructure, legacy software/SaaS market risks | | 18:10-20:41| Diameter’s founding, partnership, and Goldman Sachs relationship | | 21:03-23:42| Early fascination with fantasy baseball and stats analytics | | 24:55-28:34| Involvement with supporting U.S. Soccer and 2026 World Cup effort | | 28:46-31:22| Lightning round: first investments, strengths, mentors, passions | | 30:38-31:13| Excitement about the World Cup and AI’s adoption in coming years |

Language, Tone & Speaker Attribution

The tone throughout is collegial, direct, and data-driven, interspersed with personal anecdotes and a bit of humor. Michael Brammeier sets up topics insightfully, while Scott Goodwin offers frank, detailed responses, often weaving in analogies from sports and history to clarify complex investment ideas.

Conclusion

This episode offers a playbook for high-level credit investors navigating market dislocations and technological change. Scott Goodwin demonstrates the power of deep research, networked relationships, and broad asset flexibility, while candidly acknowledging the risks and stresses hidden beneath benign market surface data. The story of Diameter’s founding, woven with humorous and insightful life anecdotes, makes this not just a primer on markets but a relatable portrait of a modern investor. For anyone interested in where credit markets are heading—and the mindset required to thrive—this episode is a must-listen.