At a loan conference some years ago we referred to middle market loans as the Rodney Dangerfield of capital markets. These small, illiquid instruments were the poor step-child to high-yield bonds and large leveraged loans. But at Creditflux’s inaugural New York conference on private credit this past June, it was clear the situation has changed.

In a series of remarkable panels, the leading players in what has become the hottest asset class on the planet talked about the opportunities and challenges of middle market direct lending. Topics included credit quality, capital formation, risk management, the competitive landscape and the regulatory environment.

The most thought-provoking conversation was among the leaders of the top middle market firms – Antares, Ares, Churchill, Golub and NewStar. These CEOs (or, as we dubbed them, the heads of the Five Families) were asked to describe the state of the middle market in one or two words. This is what they said:

“Transparency.” Middle market arrangers have worked hard to provide investors with the same level of information on both portfolio metrics and asset-level performance as public and rated instruments. That has greatly enhanced the attractiveness of private credit to institutional and retail buyers.