It was a pleasure moderating “The Allocator Playbook: How LPs Are Shaping the Next Phase of Private Credit” in London last week.
As the asset class enters its next phase, one theme came through clearly: for LPs, the focus is returning to fundamentals — disciplined asset allocation and rigorous manager selection.
💡 A few takeaways from the discussion:
Diligence is becoming forensic and data-driven. Allocators described requesting loan tapes, deal files and underwriting models, and tracking how individual loans have performed over time. Glossy pitchbooks count for little. The questions are getting more granular:
• Origination: Is the deal flow actually good?
• Co-Investors: Is there retail money creating pressure to deploy, as with BDC issues this year?
• Underwriting: Is diligence being performed with sufficient depth, quality and discipline?
• Operations: Can the manager effectively support semi-liquid or evergreen structures — and provide the underlying data LPs increasingly expect?
• Valuations: Do the marks stand up to scrutiny?
• Regulation: Expectation that solvency capital charges on private credit to rise.
LPs are consolidating around fewer, deeper GP relationships.
Larger allocators are increasingly concentrating capital with managers that can offer breadth, institutional infrastructure and tailored solutions. For GPs that make the cut, that can mean a larger share of each relationship — but also a materially higher bar for transparency, data, reporting and overall service.
At the same time, evolving strategies create openings for new managers.
When allocators enter areas such as asset-based finance, they may start with the strategy first and then evaluate the market broadly, rather than automatically turning to incumbent relationships.That creates opportunity for emerging and specialist managers.
But being good isn't enough — GPs need to be visible, credible and relevant at the moment an allocator is looking to build exposure.
My biggest takeaway: as private credit matures, differentiation is shifting from simply having access to capital and deals to demonstrating the quality of the underlying assets, underwriting and operating infrastructure.
The next phase of private credit may be less about growth at all costs — and much more about proving what sits underneath that growth!
A pleasure sharing the stage with Alison Trusty, Toby Buscombe, Moritz Zander, CFA, and jiwei dong for a thoughtful and engaging discussion. Thank you as well to LPGP Connect for bringing together such a strong group of industry leaders and for an exceptionally well-organized event.
