Credit

“They would use equity to pay for work that was Getting reimbursed on a very short cycle, which is a terrible use of equity dollars, so, like, a really expensive way to finance this kind of work. And so credit makes, like, much more sense, right? It's much more…”

“What's also very interesting is we see people buying up more and more credits on top of the subscription.”

“In credit, you only get your principal and interest. You should not be around risk taking. As a rule, you should be fully diversified. In the equity business, you actually get paid for risk taking.”

“So the two that we've kicked around for a long time are public equity on the one hand and then credit on the other hand. And I think there's really good reasons to do both. And then there's issues with both in terms of issues specifically with respect to runni…”

“If you're long credit, you're short volatility. You want things to chug along, Because you don't have upside. Yeah, growth is okay, but you more want stability.”

“We're gonna start monetizing our AI usage through credits as well.”

“There's only so much you can deploy in private equity. When you are making six or eight consequential decisions a year, there's only so much capital you can deploy on that basis. In the credit business, instead of buying a hundred million of this particular bo…”

“As with all forms of credit. It's not just someone who can source and originate and underwrite credit, but also someone who can deal with problems when they arise and credit problems always arise.”

“In evergreen strategies, credit fits quite well into those wrappers because they're more cash flowing than private equity. You have cash income Refinancings, shorter duration, three to five year assets. Whereas in private equity, these are longer duration asse…”

“I thought back then, and I continue to think today, it leads to better thinking, because if I were to overly generalize, the private equity investors think everything is going to the moon, the credit investors think everything is going to zero, and it's good t…”

“Where I see it working really well would be within the department. So credit. Credit is, they're really good at moving capital around. We're saying, we think structured credit is more attractive than corporate credit. We think European credit or Asian credit i…”

“Snowflake had one skew, a credit, and so we had to measure use cases, and use case wins that have no purchase order.”

“Nowadays it's with one rupee or down payment, nothing, no zero. Credit is accessible. So it's the lower income people are getting carried away. And that is where they're getting exploited.”

“If you have credit that's screwed up even if it's legitimate stuff, you can do amazing stuff in six months. But you can't do very much in six weeks. Almost nothing.”

“It was probably about 15 to 20% of the portfolio into credit over about three months. So it was quite a big decision, and clearly that decision paid off very well. Those initial investments returned above 20%.”

“And I think that to the extent these new products get introduced to the industry, it's gonna be because they see an unfair advantage, ah, in their ability to deliver on that because they have this unique insight into, like, what these companies really need and…”

“The reality is that we're going to have two quarters of global growth that are going to be absolutely horrible. And in that context, the market clearing price of earnings, and therefore the market clearing price of equities in general, in the US in particular,…”

“It started with Apollo buying Athene, and more and more you see the insurance liability base matches really well with credit with some incremental yield, and it's an extremely low cost of capital for the managers.”

“If you look at the real risk in their portfolio, it's probably 90% driven by equities, and it comes in all sorts of different forms, private equity, public equity, credit. You end up with portfolios that there's just one risk factor, which is equities.”

“There's huge amounts of credit being extended that is backed By GPUs.”

“Credit was the biggest of all of those from a factor perspective that really changed. We had never bought credit before. It wasn't really in our mandate. Will is a high risk, high return investor, equity oriented, perpetual life, all those things.”

“I think it's harder for the equity investors because they identify a stock and they make that purchase and then they hope the next day or shortly thereafter, the rest of the market agrees with their investment thesis and buys that stock. So that trades up. If …”

“And then we also have, which is pretty interesting, we have zero allocation to credit, which is a little bit unique. Most public pensions have some allocation of credit. We don't have any.”

“That's how you can start and scale quickly is by leveraging your credit to invest in things that are going to produce cashflow.”

“Being in credit. It's like being a professional free throw shooter. You know, it's like, there's not, there's no glory or professional penalty kicker. Whenever I'm watching a soccer match, everybody loves PKs and I'm looking, I'm like, this reminds me of my jo…”

“One of the things I learned pretty early on when I started looking at credit is credit is one of the asset classes that works for you. 24 hours a day, seven days a week. You're accruing a coupon all the time. So if done correctly and minimizing losses, there's…”

“Credit actually looks pretty attractive because it has repriced.”

“I think credit and macro are the two areas that we are most excited about moving forward.”

“I think we might actually start seeing a real carbon capture market appearing in, in the next decade because of these credits.”

“So Aries today is about 2600 people. We have 30 offices. The rough breakdown today is about 700 in New York, 700 in L.A. And about 400 in London. And then the balance are either folks out originating new deals or looking for clients. 360 something billion of A…”

“Some of the differences, first, there are a set of Areas that endowments seem to like to invest in that to us seemed like poor returns on risk. And so those included for most of the 16 years we've been doing this, most of credit has fallen in that category. Wh…”

“If you're in a commingled fund and credit, and the manager is very liquid terms, but the underlying assets aren't very liquid, that can get you in trouble very quickly. If they put in a large redemption and start selling at bad prices, that negatively affects …”

“Our investment strategies are tilted towards solutions that come in forms that limit dilution to existing equity owners. So think about things like credit. So that would be a natural one, because there is potentially no dilution to existing equity owners there…”

“We think of it, equities, vol is the highest, and then credit is about half of that, and the currency is about a third of equity vol, generally speaking.”

“And that business has grown significantly from zero to almost now, 30 to 35% of our overall business Comes from credit.”

“And obviously, most of all, that would probably continue to be a very strong headwind for what remain hideously overpriced long duration hyper growth stocks. I mean, obviously, but it's also a bit of a headwind for credit.”

“Venture capital often becomes more of a sales and business development asset class than it does an investing asset class. It's very rare that in venture, you're crunching a bunch of data, whereas in credit, you're just relying on the data.”

“Hubris is the most dangerous thing in the world in credit. You need hubris to start a business. In fact, maybe you need an irrational amount of hubris, but you need to have the humility to know how confident, overly confident you're probably actually being.”

“When you're lending money, it's almost like dating. You can break up easily when you get paid off, but you also have a front row seat to understanding businesses, industries, management teams in a lower risk way than if you're at the bottom of the capital stru…”

“We need to supplement the trading and debt skills because that is a business of many decisions with imperfect information rather than few decisions with, in a perfect world, perfect information. I believe that those teams need to be different and need to be se…”

“We do a lot of things in credit that are in the shadow of the law. Right. Whether bankruptcy is coming or there's going to be litigation or what a document says, but that's not it. I also need to know what the price of oil is going to be. And I need to know wh…”

“I think the reason you wouldn't want to do that is because credit is such a bigger Opportunity than equity. There's just more companies that should take credit than should take equity.”

“In India, the issue is not demand. It's really supply of credit.”

“Risk parity in our mind is not just holding a bunch of line items at similar risk because a simple example is credit is if you hold credit in a leveraged fashion, you could make it have a similar risk level to equities, but it actually performs very similar to…”

“Trying to quantify credit is something which has never worked and I don't think ever will, because you're basically saying, okay, these guys at the rating agencies, they did it right, or I'm missing the motivations of the underlying leverage.”

“And that's true for credit as well, where sure, again, just like equities, there could be another leg down, but the yield is pretty attractive and should compensate you fairly well for the default cycle that we're likely to go through.”

“Look at credit, and you say credit is extremely stretched. Why would we be putting a new dollar into credit?”

“It was probably about 15 to 20% of the portfolio into credit over about three months. So it was quite a big decision, and clearly that decision paid off very well. Those initial investments returned above 20%.”

“Our overweights, we still have some overweights in credit. We have virtually no core fixed income. It's all, we'd rather take credit risk than any kind of duration risk.”

“It wasn't part of the traditional fund of hedge funds toolkit. It certainly wasn't part of an average institution's asset allocation. It was bits and pieces, some distressed credit, corporate credit, yes, but a few mortgage funds here and there. It was nothing…”

“Up until the last two years, I would have a very difficult time finding an institutional investor who had a dedicated credit component to their own.”

“We would argue it should be a systematic part of the portfolio. And I think really that is because it arguably is, is and could be taking the place Of what that fixed income component always had.”

“Because if you go to your typical investment committee, there are 10 guys and gals who know equities. They're private equity people. They're hedge fund managers. They're long only managers. You rarely get to the committee where of the 10 people, six are credit…”