At Thursday's Private Assets retreat in Fort Lauderdale on Thursday, Alts experts weighed in on the future of private credit.
By Eva Thomas
As cash floods the private credit space, there are still new areas to put that cash to work, according to three alts experts who spoke at Citywire’s Private Assets retreat in Fort Lauderdale on Thursday.
‘We’ve been really big fans of asset-backed credit broadly,’ Maxwell Snyder, vice president of investment solutions and alternatives at NewEdge Wealth, said during Thursday’s panel discussion.
In addition to Snyder, the panel also featured Brian Heimowitz, vice president of alternative investments at Concurrent Investment Advisors and Kim Flynn, president of XA Investments, a Chicago-based firm that provides fund structuring and consulting services focused on registered closed-end funds.
Private credit has been raked across the coals in headlines recently, following the collapse of two auto conglomerates. But panelists discussed which sub-asset classes they aren’t shying away from in the space.
During the panel, Snyder pointedly separated asset-based lending and asset-backed lending. Asset-based focuses on financial and non-physical assets, whereas backed invests in hard assets such as real estate, equipment and other tangible assets.
In asset-backed lending, Snyder said his team sees the most opportunity.
‘You’ve gotten to a point where there is a great opportunity in those markets. It continues to be very fragmented and difficult for banks to play in, which will help create some kind of moat around the premium there,’ Snyder said.
He added that NewEdge has been really focused on managers playing in markets that are, by definition, hard to access, like shipping and intermodal transport, which involves two or more modes of transportation.
Flynn agreed with Snyder in terms of opportunity in the asset-backed and asset-based credit space. In May, she wrote a column for Citywire talking about the growing demand for asset-backed and asset-based lending as the demand for corporate credit shifted.
Flynn and XA predicted that ‘2025 was going to be the year of asset-backed or based lending.’
‘That has been the case. Net flows have been going to asset-backed lending,’ Flynn said.
Flynn also pointed to the real estate debt sub-asset class as an area of opportunity. She said that it has been a hot topic of conversation throughout Citywire’s Private Assets retreat.
‘Maybe that’s just a steppingstone to try to get advisors to come back to real estate, but we are going to see more product, whether or not we see it in flows,’ said Flynn.
Snyder shared Flynn’s sentiment regarding real estate debt.
‘If you’re not talking about the debt maturity wall and the $2tn of debt that is due over the next four years, you might be missing the boat on a lot of really great opportunity,’ Snyder said.
He added that in real estate, NewEdge has been thoughtful about being opportunistic investments across the capital stack and where ‘you can get access for really high quality properties that are well leased, that just weren’t financed properly, on a fundamental basis.’
Concurrent’s Heimowitz sees it a bit differently in terms of opportunities in sub-asset classes of private credit.
‘I’ve been hearing about the real estate maturity wall since 2015 … so I don’t know,’ Heimowitz said
As for asset-backed lending and asset-based lending, he also pushed back.
‘Senior secured direct lending is going to have a premium to what you’re seeing in the hard asset-backed lending strategies. Looking at the more asset-based strategies, I feel like you’re not always getting a complexity premium. I’m not saying that there aren’t diversification benefits, I just don’t know if it’s worth all the effort,’ Heimowitz said.
