Already a member? Q&A with Matt King
Macro and credit strategist, founder of Satori Insights and one of the most widely followed commentators on financial markets.
Q. In your keynote you presented a fascinating macro picture of the landscape post-GFC, explaining how monetary and fiscal policy has distorted liquidity and financial conditions, driving ever increasing valuations but also systemic fragility. What were your thoughts on hearing the panellists discuss the details of capital markets transactions, restructurings and risks including in Private Credit?
I confess to being somewhat taken aback by quite how strongly the bottom-up experiences from the portfolio managers and analysts mirrored my top-down arguments. No one saw "value" in what they were buying; everyone simply argued inflows gave them no choice.
I guess in terms of the systemic risk I was reassured that CLOs in particular are simply experiencing losses they're designed to take, which is an argument I'm very sympathetic to. And for now, the combination of the widespread abandonment of covenants and the ongoing technical seems likely to suppress the near-term fallout from cases like First Brands.
But when everything feels so one-sided, it's hard not to see broad-based consequences if at some point there's a longer-lasting reversal of the technical.
Q. What do you expect the key themes will be at our next annual conference in October 2026? Both at the macro level and day-to-day issues?
Given how many years we've already been debating the combination of technicals overwhelming fundamentals and increasingly aggressive and innovative methods of restructuring, it seems unlikely those themes go away!
Likewise with respect to managers' ability to forecast or mitigate issues like low recoveries following LMEs. The question of the quality of ratings in private credit space looks increasingly as though it may feature, as may the impact of the broadening of the investor base towards retail.
I was surprised this year not to see something more explicit about SRTs. And then there's the sheer scale of hyperscaler capex, their data centre and power needs, and the associated debt issuance - though without ironclad guarantees I think my instincts there would be to want to own equity rather than credit.