Where Opportunity Exists in Private Credit
In recent years, several charts and league tables have circulated illustrating the growth of private credit. They often compare managers by assets under management, highlight the concentration of capital in the United States and Europe, and suggest where scale has accumulated.
These visuals are helpful. They illustrate that private credit has become a permanent feature of institutional portfolios.
They are less helpful when answering a more critical question. Not how large the market has become, but where opportunity actually exists within it.
Size changes behavior
As capital accumulates within any strategy, behavior changes. Markets become more competitive. Pricing tightens. Structures become more standardized.
In private credit, scale naturally directs capital toward transactions that can efficiently absorb it. Larger borrowers. Larger commitments. Broader participation. This is a practical outcome of managing capital at scale.
What matters for allocators is not only whether this dynamic is positive or negative, but what it implies about where opportunity remains.
Where inefficiencies remain
However, as competition increases in the larger end of the industry, certain parts of the market remain less standardized. Smaller transactions. Situations requiring bespoke structuring. Businesses where asset quality and operating nuance play a greater role in underwriting outcomes.
These segments are shaped less by volume and more by selectivity, complexity, and the time required to assess and monitor risk. For some managers, this influences how capital is allocated. For others, it defines the core of the strategy.
Choosing where to operate
Private credit spans a wide range of borrowers, structures, and transaction sizes. As a result, capital tends to organize itself into distinct segments, each shaped by its own constraints and opportunities.
Our strategy is designed to operate within one of those segments. We focus on asset-backed transactions in which structure, collateral, and selectivity play central roles in shaping outcomes. These areas tend to be less standardized and more relationship-driven, which influences who participates and how they participate.
As capital concentrates, opportunity can emerge in segments with fewer participants.
Arbitrage of capital protection without giving up return
When fewer participants are active in a segment, the advantage is rarely headline yield. More often, it is structure. The ability to lend against tangible assets. To establish terms deliberately. To focus on downside protection as markets evolve.
In private credit, this form of arbitrage tends to be incremental rather than visible. It appears in collateral coverage, documentation, and underwriting decisions rather than in league tables.
Understanding outcomes, not rankings
League tables and asset rankings provide a snapshot of where capital has accumulated at a point in time. They are less informative about how individual strategies are constructed, how risk is managed, or why outcomes can differ across managers operating within the same broad asset class.
As private credit continues to evolve, investors may benefit from looking beyond size alone and toward how strategies are designed to operate within their chosen markets. In that context, understanding where a manager lends provides a different perspective than size alone.
