Industry Insights: Exclusive Interviews

On this episode of Industry Insights, Julie Miecamp sets the scene before Kent Collier, CEO and founder of Octus, sits down with Kieran Goodwin, partner at Saba Capital, and Mark Fischer, director of credit research at Octus. Kent opens on how private credit went from the asset class that didn't break to one investors question daily (00:02:06), and the three start with Kieran's three decades in credit (00:02:48) and how Saba finds its edge (00:05:34).

From there they get into where private credit really stands (00:07:08), from a 2021 vintage already at 10% cumulative defaults to the recovery question Kieran says nobody wants to ask out loud (00:09:11). They cover what the BDCs are disclosing (00:09:42), redemption queues and the asset liability mismatch (00:12:27), the risk of forced sellers in interval funds (00:14:02), dividends that cash income no longer covers (00:16:34) and why discounted BDCs should be buying back their own stock (00:19:46).

The back half turns to software, roughly a third of private credit. They get into portfolio construction and concentration (00:23:36), Kent's hot take that Medallia was always a bad business (00:27:22), how thin workout expertise is across the street (00:30:38) and who actually sells stressed loans at 70 to 90 cents (00:31:38). They close on winners and losers in levered software (00:34:40), whether this is a liquidity crisis or a credit crisis (00:37:24), regulators circling (00:38:02) and why Kent thinks the pain trade is still ahead (00:39:54).

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Hosted by Julie Miecamp
Conversation led by Kent Collier, CEO and founder of Octus
With Kieran Goodwin, partner at Saba Capital, and Mark Fischer, director of credit research at Octus
Produced and edited by Tanya Hubbard
A production of The Octus Podcast Network
  • (00:00) - Julie Miecamp introduces the episode
  • (02:06) - Kent Collier sets the private credit stage with Kieran Goodwin and Mark Fischer
  • (02:48) - Kieran Goodwin on three decades in credit
  • (05:34) - How Saba finds its edge
  • (07:08) - The state of private credit and the recovery question
  • (09:42) - What the BDCs are disclosing
  • (12:27) - Redemptions, forced sellers and the asset liability mismatch
  • (16:34) - Dividends, buybacks and BDC consolidation
  • (23:36) - Portfolio construction and concentration risk
  • (26:30) - Software, Medallia and the workout question
  • (31:38) - Who buys the stressed loans
  • (34:40) - Winners, losers and levered software
  • (37:24) - Liquidity crisis, regulators and the pain trade ahead

What is Industry Insights: Exclusive Interviews?

Industry Insights sits down with the people who run the firms that move the credit market. Private credit, CLOs, restructuring, munis and everything in between. Every episode brings a new guest and a new interviewer from across Octus, talking through what they're seeing, what's changing and where they think it all goes next.