Private credit has grown into a $1.6–1.7 trillion market, but much of the current narrative is dominated by concerns around defaults, AI disruption and liquidity.

In this episode, David Hirschmann, Co-Head of Permira Credit, explains why private credit is a structural evolution of the financial system, not a cyclical boom, and why much of the perceived risk reflects a misunderstanding of how credit actually works.

What we cover

🔹The post-GFC origins of private credit

🔹How direct lending competes with syndicated loans

🔹Why borrowers pay a premium for certainty and flexibility

🔹 The role of equity cushions in protecting lenders

🔹 What really happens in a default scenario

🔹Why extreme default forecasts may be overstated

🔹The difference between equity risk and credit risk

🔹How AI impacts credit underwriting

🔹Why information advantage matters in private credit

🔹How LPs assess and differentiate managers

Private credit is often judged through an equity lens, focusing on valuation risk and market sentiment.

In reality, credit investing is driven by cash flow durability, capital structure and recovery dynamics, which can produce strong outcomes even when equity returns disappoint.

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David Hirschmann

Co-Head of Permira Credit & Head of Private Credit

🔗CONNECT on LinkedIn

https://www.linkedin.com/in/david-hirschmann-4072a2/

🌐 https://www.permira.com/investing/credit

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Ross Butler

Founder and Host Fund Shack

🔗 CONNECT on LinkedIn

https://www.linkedin.com/in/rossbutler1/

🌐 www.fund-shack.com

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📘 Order Ross Butler’s book

👉 Invest Like a Barbarian: Share in the spoils of the Private Markets revolution

♾️ http://q-r.to/Invest-Like-A-Barbarian#investlikeabarbarian

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Chapters

00:00 – Private credit: structural shift or temporary boom? Why the asset class has grown so rapidly and why the current narrative may be misleading

02:20 – The post-GFC origin story. How bank retrenchment created the opportunity for private lenders

04:30 – Banks vs private credit: competition or coexistence? Where banks still dominate and where private lenders have the edge

07:00 – Private debt vs syndicated loans. Cost vs certainty, and why borrowers increasingly choose private markets

10:30 – Is private credit too borrower-friendly? Relationship lending, sponsor alignment and the role of equity cushions

12:00 – What happens when deals go wrong? Restructuring, debt-to-equity conversion and recovery dynamics

14:30 – Default rates: are markets overreacting? Why extreme forecasts may reflect macro fear rather than fundamentals

16:00 – AI risk: equity vs credit perspective. Why technological disruption impacts valuation more than repayment

20:00 – What investors get wrong about credit risk. Why leverage and covenants alone don’t tell the full story

23:00 – Case study: restructuring and recovery. How a challenged investment still delivered a positive outcome

25:00 – Can LPs really differentiate between managers? Market concentration and what actually matters in manager selection

27:00 – Why experience is critical in private credit. Downside management, restructuring and long-cycle investing

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About Fund Shack

Private Markets Podcast, Fund Shack

www.fund-shack.com

Explores private equity, private credit, infrastructure, secondaries and private wealth access through long-form, technical conversations with leading practitioners and thinkers.

💡 Suggest a guest: katie@linearB.media

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