Private Credit’s Saving Grace Now is Tighter Covenants: Q&A

Loans may be getting clobered, but private credit will still offer great returns in part because the lending agreements are stricter than in public markets, said Marc Lipschultz, co-founder of private lender Blue Owl Capital.

Private lenders will have more levers to recover the funds they lent out to struggling company than investors who bought junk bonds or leveraged loans, Lipschultz said. He spoke to Bloomberg’s David Brooke in an interview on June 13. Comments have been edited and condensed.

How will private credit withstand higher defaults?

Private markets don’t live entirely in a vacuum-- when the environment ...