Asset-Based Lending

While headlines related to private credit’s direct lending sector have captivated market participants over the past month, there exists a meaningful investment universe, each with distinct characteristics, under this broader umbrella. Following direct lending, the asset-based lending (ABL) industry has experienced consistent growth and renewed investor interest.

ABL is a form of lending in which loans are primarily secured by a borrower’s tangible assets rather than by cash flow or earnings. Common forms of collateral include accounts receivable, inventory, equipment, and, in some ca

Outside of energy commodities, capital markets posted a downbeat March as cross-asset volatility spiked in response to the outbreak of hostilities in the Mideast, and kicked off April in similar, choppy fashion before posting a swift bounce following last Wednesday’s two-week ceasefire agreement. While a positive breakthrough, it may still be a little too early to sound the ‘all clear’ as the flow of oil through the Strait of Hormuz remains constrained. Don’t forget, behind today’s headlines, the economy is still dealing with negative trade and immigration shocks and a positive artificial intelligence (AI) shock.

Private markets benefited enormously from the post-Great Financial Crisis era of ultralow interest rates that stretched through much of the 2010s and into the early 2020s. Amid regulatory change and muted returns in traditional fixed income during this time, investors were increasingly pushed into alternative areas of capital markets in search of yield. Private credit, in particular, emerged as a favored destination for institutional capital, including pensions, endowments, and insurers. The sheer volume of capital entering the space created competitive pressures that, in hindsight, were distinctly late cycle. Spreads compressed, underwriting

Early in my career, during a particularly challenging market environment, a mentor remarked that there are always opportunities — you simply have to look for them. That observation has remained a key tenet of my investment philosophy, particularly during periods of increased volatility.

Market sell-offs are disruptive and often heighten investor uncertainty. We have recently experienced one of those periods because of the ongoing war in the Middle East. Oil prices have surged and the S&P 500, at its March lows, has declined 9% from its all-time high set in February.

But improved market fundamentals might be