Private Credit Is Moving From Stability to Selection

The System That Replaced Banks The current stress in private credit is best understood by starting at its core. Business development companies were not built as opportunistic yield vehicles. They were created to solve a structural gap in the U.S. financial system that became more pronounced after the Global Financial Crisis, when banks retrenched from lending to smaller, more levered businesses. Operating under the Investment Company Act of 1940, BDCs were designed to provide capital to middle-market companies that lack access to public debt markets but remain critical to the economy, employing tens of millions and generating trillions in revenue.…

Digital Credit: An Attempt to Build a New Asset Class

The Lineage of New Asset Classes In financial markets, truly new asset classes are rare. They tend to emerge only when significant structural or technological shifts change how capital is allocated. Mutual funds first took root in the early twentieth century, and the 1976 launch of the first index fund, championed by John Bogle, set the foundation for modern passive investing. The 1970s also introduced modern options markets, reshaping hedging and speculation. The 1980s added mortgage-backed securities, creating an entirely new segment of fixed income. The early 1990s brought exchange-traded funds, transforming liquidity and market access. In the 2010s, cryptocurrencies…

The Rise of Stablecoins: A New Era for Digital Money

A significant yet often overlooked transformation is reshaping the global financial landscape: the emergence and rapid growth of stablecoins. These digital assets, usually tied to the value of the US dollar, offer a stable alternative to highly volatile cryptocurrencies. They combine the advantages of digital tokens, including fast settlement and programmability, with a predictable valuation. This makes them increasingly attractive for payments, trading activity, and storing value across both the crypto ecosystem and a growing number of emerging markets. Simple design, large impact The core design of fiat-backed stablecoins is straightforward. They maintain their value by being fully backed by…

Three Pillars of Private Equity

Private equity (PE) remains one of the most dynamic and influential forces in global capital markets. From fueling innovation in fast-growing startups to transforming legacy corporations, PE firms employ a range of investment strategies tailored to different company stages, market conditions, and risk profiles. Among these, three categories dominate the landscape: Add-On Acquisitions, Leveraged Buyouts (LBOs), and Growth Equity. Each of these investment profiles serves a distinct purpose in the private capital ecosystem. Understanding how they differ is crucial for fund managers, LPs, and entrepreneurs navigating today’s complex investment environment. Below, we explore each strategy in detail, supported by academic…

Evolving Treasury Liquidity, shifting demand and structural fragilities

As Treasury is looking to refinance significant portion of it’s short term treasuries, investors demand will remain a question. It was mentioned multiple times over last tow years that China significantly reduced their treasury holdings. More recently we seen Japan which had largerest drop in US treasury holdings since 2022. There is also popularization of treasury futures to gain duration exposure through easier execution and more flexible accedd to leverage. This causes flattening of the cash Treasurties demand amongst fixed income funds which we see post 2020. This reduced bond managers demand for cash bonds, increase the risk of disorderly…

Why the Expected Small-Cap Rally Never Took Off

Investors entered the past year optimistic that micro-cap stocks would experience a significant rally, driven by expectations of economic resilience, supportive monetary policy shifts to monetary easing, and attractive valuations. However, the much-anticipated micro-cap resurgence failed to materialize, leaving investors puzzled. U.S. small-cap stocks have declined just over 6% since the March rally, remaining roughly flat over the past year. Despite rising more than 20% from their 2022-2023 lows. Several key reasons underpin this underperformance: Over the past two decades, the Russell 2000 has steadily lost its performance edge over the S&P 500, shifting from being a historically reliable outperformer…