The rise of private credit in a post 2008 world

Nelson Chu joins us today to discuss the rise of private credit! He's here to share how private credit emerged as a significant player post-2008 financial crisis when banks scaled back their lending. Despite his initial lack of experience in credit, Nelson was drawn to private credit for its potential to offer shorter durations, lower minimum investments, and attractive yields compared to traditional bank loans. Today we discuss...

How Nelson started his career in finance, working at Merrill Lynch, Bank of America, and BlackRock.

He left traditional finance to start a consulting company and then founded Percent, focusing on private credit.

Non-bank lenders fulfill the ongoing demand for loans by raising money from the private credit market.

How banks are finding ways to re-enter the lending market through joint ventures and leveraging other business parts.

The private credit market seeing pressure due to high interest rates and increasing defaults in consumer credit.

Competitive tension between banks and private credit lenders influences the cost of capital and lending rates.

How Nelson's company Percent focuses more on conventional private credit opportunities rather than real estate.

Lenders are being more selective in extending small business loans due to the current risk cycle.