We were perusing recently a piece on the future of private equity in an excellent state of the market study from Evercore’s private funds group. One of the paragraph section subtitles read: “The corporate governance fix that became an asset class.”

The thesis was that private equity sponsors solve strategic problems for growing (or challenged) businesses by giving management upside in the performance of the company in exchange for capital and corporate support. That fix, of course, has led to the development of an industry that so far has amassed, according to the article, AUM of $14 trillion.

In the same way, we think, private credit has grown from a back-water of middle market lending in the 1980’s to beachfront in the fastest growing element of the capital markets. We would suggest private credit is “The regulatory fix that became an asset class.”