Gregg Solomon

Capital Group and KKR launch two interval funds to expand retail access to private credit. Capital Group and KKR have debuted Capital Group KKR Core Plus+ and Capital Group KKR Multi-Sector+, two new public-private credit interval funds designed to blend traditional fixed income with private credit strategies. Each fund targets a 60% public / 40% private credit mix, offering quarterly liquidity of up to 10% NAV—double the industry norm—and competitive fees of 84 and 89 bps, with a $1,000 minimum investment. CEO Mike Gitlin called the products “the best of both worlds,” combining public and private exposures for diversified outcomes. KKR Co-CEOs Joe Bae and Scott Nuttall said the launch “shows what’s possible” when combining their firms’ complementary strengths. The partnership extends beyond credit, with equity-based and retirement strategies in development, alongside a robust advisor education platform to support portfolio construction and asset allocation. As KKR’s Global Head of Client Solutions Eric J. Mogelof put it: “The opportunity set for public-private solutions is untapped both globally and across asset classes… Together, we are building a new public-private category for investors and the educational resources to equip advisors and individuals to learn more about private markets and the potential benefits of incorporating private assets into diversified portfolios.” With Capital Group managing $2.8T and KKR $600B, this marks a significant step in democratizing private markets access. https://lnkd.in/ghQjsj3k

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We’re excited to see Labyrinth Capital Partners featured prominently in Carta’s latest report on GP-led secondaries. The report, authored by Kevin Dowd, offers one of the clearest and most comprehensive looks at how GP-led transactions are evolving to meet liquidity needs in today’s private markets. It highlights the nuance, complexity, and growing importance of this segment. This perspective, along with others in the report, underscores the central role GP-led secondaries are playing in shaping liquidity solutions for investors. Well worth a read for anyone following the future of private capital markets. See the full report here: https://lnkd.in/eGrVfQPS

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Shared exits look stable until synchronized liquidity disappears. That isn’t a critique of pooled structures. It’s a duration question. If a return depends on everyone exiting together, timing risk isn’t removed. It’s shared. We don’t underwrite around coordinated liquidity. The co-development we’re closing follows a simpler rule. At completion, investors receive defined units with clean title. Execution runs through delivery. Post-handover timing sits with the owner, not a sponsor-managed sell-down. In pooled structures, duration exposure is mutualized. In physical ownership, it is concentrated, with full discretion over timing. Neither is superior. They allocate duration differently inside a portfolio. We structure projects so the asset must stand on its own at delivery, without relying on synchronized exits to validate the underwriting. If coordinated liquidity disappeared at handover, would your model still clear or was shared timing absorbing duration you didn’t price?

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L&B White Paper: The Executive Compensation All Stars Link to white paper: https://lnkd.in/eHpckwP3 Welltower (NYSE:WELL) and Iron Mountain (NYSE:IRM) are “All Stars” in REITs generating consistent outperformance to proxy peers. A combination of tailwinds in their core businesses and effective management likely played roles in their strong results. Given significant shareholder value creation we are confident these executives have earned their compensation.

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AI is everywhere right now — in headlines, boardrooms, and dinner table conversations. Some call it the modern gold rush. But hype doesn’t equal value. My colleague Tim Hoyle explores where AI sits on the Gartner Hype Cycle and what it means for investors, in the latest Haverford Market Commentary: https://lnkd.in/gdFpRUuE

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Fascinating takeaways from Davos! From Ray Dalio’s comments the TPC House (other participants’ comments in a future post): The Forces Shaping the Next Cycle Ray Dalio frames today’s world through five major forces—all of which are accelerating simultaneously. 1) Money, Credit, and the Economy • Global debt levels continue to rise. • Debt service crowds out productive spending. • Discretionary funds increasingly go toward deficit financing. • Governments—particularly the U.S. Congress—have limited flexibility to fund strategic priorities. 2) Domestic Political Order • Growing wealth gaps between rich and poor. • Rising social tension and political conflict. • Polarization is reducing the capacity for compromise. 3) International Power & Monetary Order • The post-WWII geopolitical and monetary order is breaking down. • Fiat currencies are losing purchasing power—raising the question: what truly stores wealth? • This helps explain gold’s renewed popularity. • History shows that in periods like this, power often overrides democratic norms (e.g., 1930s). • We are returning to a world where power—not rules—dominates global affairs. 4) Acts of Nature • Climate change is now a systemic economic force. • Physical damage, supply disruptions, and global instability are increasing. 5) Technology • Technologies once considered miracles are rapidly reshaping society. • Whoever wins in technology wins economically and geopolitically. • AI investment today exceeds dot-com–era levels, implying both upside and downside risk. Geopolitical Risk & Capital Flows • Actions such as potential U.S. territorial expansion (e.g., Greenland) could shock global lenders. • The U.S. relies heavily on foreign capital to finance deficits—confidence can disappear quickly. • This sets the stage for a potential capital war. Historical Parallels • We are in a period comparable to the 1930s. • The world is bruised, volatile, and uncertain—even without full-scale tariff retaliation (yet). On Society, Debt, and AI • The core issue is how we treat each other. • Wealth per GDP is higher than ever—but cooperation is weaker. • Debt and political dysfunction must be addressed. • Compromise is disappearing; politics is increasingly zero-sum. • Wealth taxes are likely coming—with major implications. A Warning: • Bubbles grow until liquidity is needed—not until wealth disappears. • Debt levels are near crisis territory. • Fear of central banks is rising—an unusual and dangerous signal. We are at a historic inflection point—defined by debt, technology, climate, geopolitics, and human behavior. The outcomes will depend less on the tools we build and more on the values, cooperation, and leadership we choose. (AI summary of my notes)

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Having run a $1B portfolio of private credit managers, I am both a fan of the asset class in principle and hesitant about the largest component of the asset class. On the positive, I am all in favor of the long-term trend of private credit managers stepping into areas of lending that were formally the domain of banks, often because changes to bank regulations over the years changed the landscape as to who was the best provider of capital in various credit segments. There are many great investment managers who are well-positioned to grow and prosper in specialized segments of private lending. On the negative, at J. Paul Getty Trust, we avoided private credit lending to finance buyout transactions. This was largely because we had such a high allocation on the private equity side to these same businesses that I didn't want to double down on exposure to them. It was also because the nature and evolution of the private equity opportunity was changing and not for the better. Yes, post-GFC, overweighting levered equity in all its forms was a great investment. But 12+ years into an equity bull market, with interest rates at all-time lows, purchase price multiples high, and a well picked over universe of public companies to choose from, it seemed the return dynamics for the strategy adding leverage to risky businesses might not no longer be the best idea. This seemed especially true if we were headed to a period of higher uncertainty at the end of a long period of economic, regulatory, and political stability and ever declining interest rates. With no disrespect to Blackstone, Thomas Bravo, or Medallia, I think this Bloomberg article by Olivia Fishlow gets at many of the worries I have for parts of private credit. In particular, the lag that can occur in loan prices, and there for the pricing of funds and structures that hold these loans, and the underlying of the of these private equity backed companies. As interest rates have stayed higher for longer, it seems like we are seeing more companies struggling under their debt burden (for example, see yesterday's stores on Claire's). https://lnkd.in/gbD5NhhG "Blackstone... marked the loan at around 87 cents on the dollar as of June 30, according to a regulatory filing. The loan was marked at around 89 cents at the end of the first quarter, and around 94 cents the quarter before that. The company is underperforming our expectations and the mark reflects that..." "The debt charges interest at 6.5 percentage points over the base rate, with 4 percentage points paid in kind, the filings show. Payment-in-kind features allow the borrower to defer paying interest in cash, often until the debt matures. The deal was structured as a so-called recurring-revenue loan, a financing avenue typically used by software companies that are still burning through cash to fund their expansion."

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Great to see Eric Mogelof on the Capital Allocators podcast, highlighting how KKR is working to broaden access to #privatemarkets. 🔓 He covered a lot of ground—how the firm is partnering with advisors, innovating with evergreen structures, and investing in education and brand to build long-term alignment. A worthwhile listen for FAs, those building in the space and everyone in between: https://go.kkr.com/45xpQnj

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💰 Private capital is moving deeper into sport Goldman Sachs’ Global Family Office Report shows 25% of surveyed family offices are already invested in sport, with another 25% actively exploring it. Alongside this, CVC has launched a $14 billion sport-focused fund, which consolidates its existing investments in Six Nations Rugby, La Liga, and the WTA under a dedicated structure. Momentous Sports has also unveiled a $750 million real estate platform targeting arenas and entertainment districts. What does this tell us? That sport is now viewed as a durable asset class, with capital flowing into scalable, yield-oriented platforms: media rights, data tech, and infrastructure. This week’s Berkida Brief digs into these moves and more. 👉 Full edition here: https://lnkd.in/gnjtpn-2 Which segment do you think will draw the most institutional capital over the next 5 years — media, tech, or real estate? #SportsBusiness #PrivateEquity #Investing #Media #BerkidaBrief

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In an unprecedented move, the US Army has invited private equity giants - Apollo Global Management, Inc., The Carlyle Group, KKR and Cerberus Capital Management to pitch strategic projects to help fund a $150 billion infrastructure overhaul. The idea? Leverage private capital and creative financing to rebuild the Army’s logistics, depots, and data capabilities from data centres on military bases to rare earth processing plants. Army Secretary Daniel Driscoll (a former investment banker himself) said it best: “We are not looking for charity. We are looking for meaty projects.” The proposals discussed included: > Building data centres on Army land under lease models > Swapping land for compute power - “instead of paying cash for land, you pay us in compute” > Private capital backing for rare earth stockpiles and supply chains This is a case of defence privatisation. A $13 trillion private capital industry is now being invited to co-own America’s security infrastructure. And it raises a fundamental question: "When national defence becomes an asset class, who really owns deterrence?" Ref: Financial Times #privateequity #defence #USarmy #infrastructure #strategy #investing

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From boom to bust... or institutional to retail? "More than 18,000 private capital funds are on the road, collectively seeking $3.3 trillion. That means there’s about $3 of demand out there for every $1 of supply (see Figure 6). It remains to be seen how much the emergence of private wealth as a source of funding can ease this mismatch by boosting supply." https://lnkd.in/dfmD4KbU

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Apollo Co-President Scott Kleinman breaks down the outlook for private equity, explaining why discipline and operational execution matter through all cycles, and how Apollo's value-oriented approach is built for varying market environments. Watch the full conversation: https://lnkd.in/ev-gUVaw

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No Bubbles Here Private Equity managers are not only brilliant, but they are also disciplined and discerning buyers. PE has slowed its deployment pace in the past two years as financing rates remained elevated and economic uncertainty weighed heavy on decision making. Historically, PE has maintained an average purchase price multiple of 10 – 12x, and today it remains in this range. Compared with the public equity market, Private Equity is indeed highly disciplined. The S&P500 Index trades at 22x (up from 18x). My basic premise is that if there is not a bubble in Private Credit (and there isn’t since PE is paying the same purchase price multiple as they paid in the past), then by definition their can not exist a bubble in Direct Lending. Furthermore, as you review the two charts below, you will notice that transactional leverage has fallen from >5.5x (debt-to-EBITDA) to 4.9x, which is a multi-year low, showing that companies have begun to delever. Further, the median equity check for PE is ~55% which is the highest level in a decade. In other words, PE is investing with a greater percentage of equity vs. debt, or on the other hand, private credit has begun to lend more conservatively than it has in the past. Note 1: Marathon is a bit more conservative that the typical Direct Lending manager with an average debt-to-EBITDA ratio of 4x and interest coverage ratio of ~3x. Our strong belief is that alpha is generated by originating private credit loans that perform well, so that we are paid our full coupons and principal at par prior to maturity. While that is the objective for everyone that lends, the simple fact is that the industry loss rates have been running at ~100bps per annum. If a manager has zero losses then the manager is outperforming their competition—thus alpha. Note 2: The Fed will begin its reduction in the Fed Funds rate today, which means SOFR will come down over time, bringing relief to companies who borrow in the BSL and Private Credit Markets. Based on the forward curve and the deal activity Marathon Asset Management is witnessing in to-be-announced LBOs, the market will enjoy a significant pick-up in transactional financing opportunities. Bottom line: Investment managers may make poor investments from time to time, and/or there may be sectors that are under stress from time to time, but there’s no bubble in Private Equity or Private Credit.

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