How Private Credit Survived Its First Test
Julie Segal – Institutional Investor
PennantPark Founder and Managing Partner Art Penn spoke with Julie Segal of Institutional Investor for her piece on how direct lenders defied gloomy forecasts for the asset class throughout the pandemic. Art noted highlighted the importance of substantial equity cushion and strong covenants throughout the downturn and offered his insight into why private credit avoided the major obstacles that many predicted. “There’s a misunderstanding about the types of businesses that middle-market private credit investors finance,” he said. “Direct lenders generally avoid industries such as airlines, hospitality, oil and gas, movie theaters, cruise lines. If you’re a classic curmudgeonly skeptical credit person, you avoid the heavily cyclical industries.”