Kipp deVeer, Head of Ares Credit Group and CEO of Ares Capital Corporation, discusses portfolio performance and downside risk management in private credit.
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“So of course we have a cumulative default charge off ratio, which is very, very low, like under five and 10 basis points for both senior and junior assets.”
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More from Kipp deVeer
Insight
deVeer: Lead private credit lenders hold a free call option on companies
“The point is you have this free call option as a lender to own companies if you have to. And if you're lending to good companies and you control your outcomes, where you're a lead investor, you can probably get to better resolutions.”
Kipp deVeerJun 2, 2025▶ 24:48Kipp deVeer – Scaling for Private Wealth Globally in Credit (Private Wealth 5, EP.449)
Insight
DeVeer: Pro-Cyclical Retail Credit Capital Inherently Risks Underwriting Discipline
“I would not want 75% of my credit capital to be in a pro-cyclical structure like this, which it inherently is, and that's where you can lose discipline.”
Kipp deVeerJun 2, 2025▶ 38:33Kipp deVeer – Scaling for Private Wealth Globally in Credit (Private Wealth 5, EP.449)
Opinion
Private Credit Gets Easier to Execute as Firms Grow Larger
“This is one of the few investment businesses, in our opinion, that's actually easier the bigger you get, so long as you continue to invest behind it.”
Kipp deVeerJul 24, 2023▶ 30:43Kipp deVeer – The World of Private Credit at Ares (EP.329)
Insight
Lenders Cannot Effectively Price Bad Credit Due to Asymmetric Downside Risk
“You can't price bad credit. You can try, but you probably won't be right. The thing that's tricky about credit is has a totally asymmetric risk profile. You get paid fees and you get paid a coupon and hopefully you get paid back. If you're wrong, you lose all …”
Kipp deVeerJul 24, 2023▶ 40:17Kipp deVeer – The World of Private Credit at Ares (EP.329)
AssertionNot checkable as stated
Lenders See No Pricing Delta Between $50M and $250M EBITDA Borrowers
“We actually don't see any delta in pricing or terms for the most part between a fifty million EBITDA company and a two hundred and fifty million dollar EBITDA company. Leverage levels are about the same. Pricing's about the same.”
Kipp deVeerJul 24, 2023▶ 45:10Kipp deVeer – The World of Private Credit at Ares (EP.329)
Insight
Sustained 12% Senior Debt Rates Would Cause an Economic Depression
“You can't finance the US economy with senior debt at 12%. You'll create a depression.”
Kipp deVeerJul 24, 2023▶ 55:05Kipp deVeer – The World of Private Credit at Ares (EP.329)
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