Curious to get everyones thoughts on the potential convergence between public and private credit. While still early on, sort of evidenced to me by banks forming private credit trading operations, more deals shifting to private but starting to look more like syndicated deals in terms of origination, and a number of prominent buy side shops structuring their credit arms so that the same team looks at both public and private credit. Anecdotally, I have gotten inbound interest for newer/smaller "cross credit" funds where the mandate is more fluid to invest across both where there is opportunity, do you think there will be growth for these types of mandates? Any potential career implications of a potential convergence, either good or bad? My guess would be the HY market will still be largely standalone but perhaps cater to larger/public issuers vs. LBOs (already seeing this with shift to LLs), but potentially as banks step away the lines between LLs and private credit get more blurred (already seeing more private CLOs). Just curious to get thoughts, thanks!
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Def gonna happen. Think Goldman is setting up to trade private deals.
I think we could see some convergence but the private credit market won't look just like the public markets. The reason for this is legal. The law just doesn't allow for private credit to trade just like public debt. However, and I think you accurately point this out, there is still things that the private credit market can do to increase liquidity. Just because the private market can't be just like the public market doesn't mean that the private market can't do some things that are more public market-like.
I think there could be a potential private convergence between my pubic credit and your mom.
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