LeveredThoughts

[LeveredThoughts @LeveredThoughts]

@BigJohn043 Agree value creation is hard. In my experience, I’m only underwriting value creation (outside of market growth) if management owns 30%+ of cap table. Otherwise you have to buy right and get the industry right.

[LeveredThoughts @LeveredThoughts]

@RobertMSterling @BoringBiz_ I mean….. he blamed the original management for bad practices and then the new management for lack of innovation. Hop off guys

[LeveredThoughts @LeveredThoughts]

@IlliquidInsight Cost of capital ticking up as well. Squeezed from all ends 🥴

[LeveredThoughts @LeveredThoughts]

@coxcapitalptnrs @JohnCoxCap BofA has a nice piece showing a three quarter lag between flows and NII impact. Q4 2026 will get interesting.

Even though we’re at the “suddenly” phase, I still feel like I’m watching a car crash in slow motion.

[LeveredThoughts @LeveredThoughts]

@jimcramer Isn't it just a bet on the useful life of GPUs?

[LeveredThoughts @LeveredThoughts]

The cheaper version of the Bain CDD report is expert networks. Cheaper still, cold LinkedIn outreach. People respond and love to talk.

All get you to the same answer. One costs $1.5MM, the other is free.

[LeveredThoughts @LeveredThoughts]

@ChairliftCap Biggest scam of private equity. By the time you’re senior enough to make investment decisions, then by the time they’re realized 5-7 years later, everyone is retired, dead or moved on

[LeveredThoughts @LeveredThoughts]

@debt_serious Asset yield compression, negative flows, cost of capital going up. The squeeze is on for BDCs

[LeveredThoughts @LeveredThoughts]

@origoinvest @JonathanWeil @WSJ @WSJheard It’s still adding leverage at the BDC level and off balance sheet. Plus if I buy a levered asset in that off balance sheet JV (e.g. ABF equity), I’ve now levered my BDC equity three ways. The leverage multiples

[LeveredThoughts @LeveredThoughts]

BDC SUNs are hard risk to price. SUN residual collateral is awful after all the performing loans get pledged away. Things get really bad you’ll be primed endlessly. Docs are terrible + information asymmetry vs the banks.

I’d rather buy SRTs from banks and call options on equity. SUNs sit in bad place. ~120bps wide of BB is false precision.

[LeveredThoughts @LeveredThoughts]

@WSJ Some of the ABF investments have meaningful asset-level leverage. Levered fund, levered off-balance sheet, levered assets. I’m sure it’s all fine.

[LeveredThoughts @LeveredThoughts]

@SpecialSitsNews Good take. But Ken, please, don’t make me disclose my levered beta

[LeveredThoughts @LeveredThoughts]

@LeylaKuni BCRED not alone. I haven't seen a single BDC where cash NII covers the distributions.

[LeveredThoughts @LeveredThoughts]

Viral scandals are the best days on Wall Street. You get like 2-3 a year. They must be cherished.

Like a twisted Thanksgiving, they pull together old IB colleagues and turn stoic old-heads giggly

[LeveredThoughts @LeveredThoughts]

@prashantrad I also think inflows masked the structural problems. Private credit hasn't faced a fundraising slowdown before and the faucet is going dry...

[LeveredThoughts @LeveredThoughts]

@junkbondinvest Negative selection bias of deals that get refi'd/bailed out vs. the names that linger will be fascinating watch. $OWL BDCs will become a graveyard of shitcos.

[LeveredThoughts @LeveredThoughts]

@JulianKlymochko BDCs and interval funds rejoice

[LeveredThoughts @LeveredThoughts]

Investors bought $6MM of Blue Owl Tech Income Corp. in March at NAV while $OTF trades at ~30% discount.

Brave souls. I want names. I need them as LPs.