direct 🅱️ender

Downside guy / prince of darkness. Private credit and other raccoonery. Ain’t shit change but the weather.

[direct 🅱️ender @directsender]

Direct lender brought their head of workouts to a diligence call for a *new* deal. Not exactly a vote of confidence is it

[BankingSlut @bankingslut]

Listen, I don’t care if you work at Monroe Capital just don’t do it in front of me.

[direct 🅱️ender @directsender]

@orrdavid Psychotic and belittling way to describe a genocide.

[Scott Goodwin @skgoodwin23]

None. Complete non issue for the banks - the loans they make it these funds are 0-25% LTV. The media is trying to find a problem there were there isn’t one. The risk is generally pretty broadly distributed, however IF there are eventual defaults and losses because of AI or a broader macro cycle there will be losses distributed across the LP base that are concentrated in the cause of the defaults. If that ends up being the current concern of AI then the LPs of those funds that have poor portfolio construction and risk mgmt and in some cases 50%+ exposure to AI threatened businesses over the long term will suffer. It’s very hard to know what the eventual impact of AI is so hard to say at this point but diversification wins when you are buying carry assets at 98-99 that can only trade to 100!

[Scott Goodwin @skgoodwin23]

There are at least 6 problems in no particular order:

-mislabeling or intentionally disguising the amount SaaS exposure in some porfolios
-no concept of portfolio construction for some of the direct lending managers
-mismarking and/or marking inconsistencies across funds
-other uses of leverage away from the basic bank/bond/clo financing of direct lending - 2nd outs, jv’s, direct clo equity investments to juice returns and mask the real underlying leverage of the portfolio
-250bln of the direct lending market is in “semi-liquid” products where underlying isn’t liquid at all
-prisoners dilemma for LP’s of that last bucket - if you don’t redeem do you just get left with the turds?

Everyone has to make their own opinion on the SaaS and AI disruptions threatened loans. I think there will be a very interesting secondary opportunity as entities look to sell to meet redemptions or reduce exposure to areas they are too overweight. Right now though to your point Boaz the public BDC’s at .85 -.95 GAV - I look at GAV not EQUITY NAV bc the latter ignores the ultimate downside risk - are cheap to where these secondary private portfolios are offered/trading - I think there will be a convergence in the near future given the amount likely to come for sale.

[direct 🅱️ender @directsender]

@Restructuring__ Pretty sure the lenders to Sonrava Health would disagree that they’ve never missed an interest payment..

[direct 🅱️ender @directsender]

Somebody should invent wifi at equinox that works

[Kevin Eckhardt @DasWreck]

Seriously if we freak the fuck out every time a bank loses $100M to a real estate scammer we’d need a shit ton more shrooms. And that $2B “hole” at FB is what we in the business call “insolvency,” I don’t recall people being like “there’s $1B MISSING at Spirit Airlines” they spent it and didn’t make it back man

[direct 🅱️ender @directsender]

@redactedrain 299 park ave

[direct 🅱️ender @directsender]

@Miscountedcf Fuck it, sure

[direct 🅱️ender @directsender]

@GrandTokamak We’ll just do co-invests for the first few deals to see how you operate and get into a rhythm. But we get to decline whatever we want after wasting weeks of your time. Oh and we want to control how we vote on everything. THEN we’ll give you some dinner money to manage I promise

[direct 🅱️ender @directsender]

@AyyouEm I don’t know how someone could defend these marks; it wasn’t exactly a secret this was going to be a donut. Lincoln/VRC/et al. are just as culpable. Must be a coincidence blackrock decided to wind down this strategy?

[direct 🅱️ender @directsender]

@AyyouEm Last two drunks at the bar leaning up against each other. Beautiful thing

[direct 🅱️ender @directsender]

@jakebrodes Picked it up after seeing this tweet. Great read, thanks man

[deedee megadoodoo @givemebudlight]

you’re either drinking a beer with me or drinking a beer against me

[direct 🅱️ender @directsender]

@kevin_b_b6 Are you some kind of idiot

[direct 🅱️ender @directsender]

@TommyOKid @MarkSpain_ Holy shit

[direct 🅱️ender @directsender]

@HighyieldHarry Is anyone surprised that returning capital to LPs is a foreign concept to these guys

[direct 🅱️ender @directsender]

@HighyieldHarry And it will work

[direct 🅱️ender @directsender]

@AyyouEm Seeing Brightwood in a deal is often a negative diligence finding in itself

[direct 🅱️ender @directsender]

@paulswaney3 Speaking from experience, every private credit business in the US is for sale right now whether they know it or not