A pair of blowups in the credit market have sparked a war of words over whether banks or private credit firms are better positioned to weather a broader downturn https://t.co/PiWtCx2hj6 ...

Core Insights - The shift towards evergreen funds is expected to lead to allocations reaching up to 90% of total private asset investments in the next three to five years, driven by the removal of barriers such as high minimum commitments and long lock-up periods [1][3] - The introduction of new investment vehicles has made private market investments more flexible, transparent, and administratively efficient for wealth managers [2] Industry Trends - There is a significant increase in individual investors' appetite for private markets in Europe, particularly with the emergence of semi-liquid structures like ELTIF 2.0 [3] - Regulatory evolution, product innovation, and rising investor demand are converging to create new pathways for accessing private markets [3][4] Company Overview - StepStone Group manages $723 billion in total capital and is one of the largest private market investors globally, providing tailored portfolios across various asset classes to meet individual investor goals [4][5] - StepStone Private Wealth Solutions aims to address the generational shift in investment access, focusing on performance and practicality [5] Investment Strategies - The growing popularity of private credit, especially in direct lending, is highlighted as a compelling opportunity due to traditional banks retreating from the market [10] - StepStone emphasizes the importance of liquidity in product design, offering funds like SPRIM Lux with 5% quarterly liquidity to meet wealth investors' needs [7][8] Diversification and Risk Management - StepStone's approach to diversification includes access to over 100 general partners (GPs) and opportunities across various strategies, which helps mitigate risk [11][12] - The firm employs rigorous evaluation processes for investments, ensuring high-quality deal flow and reducing concentration risk [13][14] Technology and Future Outlook - Technology plays a crucial role in bridging gaps in alternative investments, with StepStone's SPI platform providing wealth managers access to critical data and investment opportunities [14] - The private markets sector is expected to continue evolving, with StepStone positioned to redefine how wealth clients engage with these markets, leveraging its institutional-grade platform [15]

In addition, the convergence of public and private markets, marked by a surge in mergers and partnerships among traditional and alternative asset managers, was a significant theme. Several products (some as model portfolios, others as semiliquid funds) have already come to market with more on the way . Several major trends were apparent throughout the first full day of the conference, including the coalescence around evergreen funds (interval funds, tender offer funds, BDCs and non-traded REITs) as the ...

Private lenders could replace 15% of traditional fixed-income investment, according to Bloomberg Intelligence’s Fall 2025 private credit survey https://t.co/Eu4SylA35Z ...

Private Credit Market - Private credit providers are potentially facing significant challenges [1] - The newsletter "Going Private" discusses the risks in the private credit market [1]

Banks might want to look at their own books for any “cockroaches,” Blue Owl Capital’s co-CEO Marc Lipschultz said, standing in fierce defense of private credit https://t.co/ql48GIckoh ...

Core Insights - The recent bankruptcies of Tricolor Holdings and First Brands Group have raised concerns in the credit markets, prompting warnings from JPMorgan Chase's CEO Jamie Dimon about potential underlying issues in the economy [1][2]. Group 1: Market Reactions - Jamie Dimon expressed that the bankruptcies serve as a warning sign, suggesting that there may be more undisclosed issues in the market [2]. - Despite strong earnings reports from major banks like JPMorgan, Citigroup, and Wells Fargo, there are concerns about potential lending troubles and economic weakness, particularly in the labor market [4]. Group 2: Private Credit Market - Investors are increasingly wary of Business Development Companies (BDCs), which are seen as indicators of the $1.7 trillion private-credit market, as they have been reducing distributions to shareholders [6]. - The largest non-traded private credit fund, Blackstone Private Credit Fund, announced a reduction in shareholder payouts, highlighting investor disillusionment [6]. Group 3: Lending Trends - A significant portion of banks' loan portfolios is now directed towards financing private-market players, which are beginning to compete with traditional commercial lending [7]. - Bank executives reassured analysts that their exposures are primarily to established private-credit firms, indicating a level of stability in their lending practices [7].

Alternative Investments Overview - Alternatives encompass assets beyond publicly traded stocks or bonds, including private equity, private credit, hedge funds, venture capital, real estate, gold, crypto, and collectibles [2] - The total investments in all alternatives are expected to reach $29 trillion in 5 years, doubling the 2022 amount [5] Investment Trends - Wealthy investors have been increasing their exposure to alternatives for decades [3] - A typical US family office allocates approximately 50% of its investments to alternatives, with about 25% in private equity and 20% in real estate [3] - Family offices have recently increased their holdings in public stocks, primarily due to AI [4] - Capital flowing into private equity has increased tenfold since the financial crisis [5] Performance and Outlook - Alternatives are believed to generate higher returns and lower volatility, but with lower liquidity [4] - Median returns for private equity have lagged public markets in both the short and long term [4] - Returns for private equity may improve as IPOs and exits return [5]

Financial Sector Overview - Bank stocks, particularly JPMorgan and Goldman Sachs, have shown a turnaround, with earnings reports contributing positively to market sentiment [1][4] - The financial sector has performed well in anticipation of a strong earnings season, with low consensus expectations leading to potential earnings beats [2][3] Earnings Reports - JPMorgan's guidance for next year suggests that net interest income expectations may be conservative, indicating potential for upward revisions [7] - Goldman Sachs and JPMorgan reported historic trading revenue numbers, contributing to positive market movements [4][5] Market Sentiment and Concerns - There are concerns regarding the impact of non-bank financial institutions (NBFIs) on banks, with analysts questioning the sustainability of the current boom in private credit and direct lending [8][9] - Despite these concerns, the overall sentiment remains positive, with companies like JPMorgan expected to perform well if capital markets remain stable [10] Investment Opportunities - Companies such as Wells Fargo have seen significant stock price increases, indicating strong performance within the sector [6] - BlackRock is highlighted as a strong investment opportunity, nearing historic highs and showing no signs of deceleration in its business operations [11][12]

Uh the bankruptcies of two companies in the auto sector have heightened concerns around certain parts of the credit market. Glenn August is founder and CEO of Oakhill Adviserss and joins us now here at Case. It's good to see you. >> Good to see you.>> So you you do business in many parts of of credit, right. Private credit, leverage loans. Last year at this conference, I sat here asking people if there was a bubble in private credit.I think it's relevant now to ask you whether we're starting to see the firs ...