Private Credit Summit
At the 2025 Private Credit Summit hosted in New York by Dechert, ING and KBW/Stifel, Dechert's John Timperio and Christopher Duerden moderated a panel discussion titled "Visionary Perspectives: The Future of Private Credit". The panel featured four distinguished heads of asset managers: Jonathan Bock from Blackstone, Ken Kencel from Churchill Asset Management, Craig Packer from Blue Owl Capital Inc. and Daniel Pietrzak from KKR, who shared their perspectives on transformation in the industry including the growth of private credit in the U.S. and Europe, how technological advancements like AI are enhancing efficiency, and offered insight into some of the best career advice they'd received.
Here are a few highlights from the panel:
- The panelists shared insights about their current roles and the best advice they received from their mentors or predecessors. Bock emphasized that bad news doesn't improve with time and that indecision is itself a decision. He noted that the difference between good and great often lies in taking action or failing to act. Kencel highlighted the importance of people in an organization, stressing the fact that success is about attracting, retaining, venturing, and rewarding the best talent to keep them within the company. Pietrzak pointed out that those who work hard and are confident in their knowledge tend to succeed. He mentioned that KKR encourages reading beyond investment topics, which broadens one's horizons and enhances performance. Packer advised patience early in one's career, as it can lead to exciting opportunities later on. He underscored the importance of enjoying one's work, building good relations with colleagues and having fun in the process.
- Private credit is experiencing a significant transformation, with managers increasingly taking the lead role traditionally held by banks. The panel concurred that private credit operations are now conducted with greater transparency, efficiency, and overall economic respect.
- The possibility of an economic recession poses the biggest risk that could potentially derail private credit's long-term progress, with U.S.-imposed tariffs creating a big overhang in the short term. In an audience poll, 55 percent of panel attendees agreed that an economic recession would be the greatest hinderance to growth in the private credit sector, up from 36 percent last year. A current concern is the Trump Administration's fluctuating policies on U.S.-imposed tariffs. Though the direct impact of tariffs is muted in the private credit sector, as many middle market borrowers are high-impact, non-tariffed companies, the current tariff dynamics are creating uncertainty and the longer that uncertainty lasts, the longer we risk ultimately falling into a recession that will then affect asset managers. Bock summed up the long-term transition of private credit in two words: institutionalization and industrialization. He pointed out that it is the managers that have invested in their people and infrastructure, and ultimately have begun to focus on alternative investments such as ABL financing as well, that can best survive economic uncertainty.
- The overall growth in private credit in the United States has led to an uptick in the same types of deals in Europe that will continue to grow. Private credit businesses in the United States are currently being replicated in Europe, and all panelists agreed that we should expect an even sharper uptick in European-based deals in the future. Part of this is due to the institutional diversity that Europe offers – the banking system is bifurcated by country, and a switch to asset managers instead of banks at the forefront can get around that.
- Advancements in AI have created unique opportunities to improve efficiency and diligence, but won't ever replace the people part of the business. Though the panelists cautioned that current AI technology is not at a stage that they would feel comfortable saying it has transformed the private credit sector, they unanimously agreed that it can be incredibly helpful in streamlining certain underwriting and diligence tasks that are crucial for making investment decisions. For instance, ChatGPT helps access and weed through a plethora of information about companies or portfolios, such as a firm's track record or how its deals in a particular industry have fared, that could otherwise remain unknown or could help optimize diligence analysis. This allows asset management firms to spend more time with what they do with the information rather than gathering it.
In conclusion, this session provided a comprehensive overview of the evolving landscape of private credit. The insights shared by industry leaders underscored the sector's dynamic transformation, emphasizing the importance of decisive action, talent management, and the integration of advanced technologies like AI. Despite the looming risks of economic recession and geopolitical uncertainties, the panelists were optimistic about the resilience and adaptability of private credit managers. As the sector continues to institutionalize and industrialize, the growth trajectory in both the U.S. and Europe remains promising. The session reaffirmed that while technology can enhance efficiency, the human element remains irreplaceable in driving success in private credit.
Contributors
The Dechert moderators would like to thank Risa Das and Lily Kazemi for their contribution to this article.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
