Bruce Richards’ Post

TINA, do you hear me? The Private ABL market is ~$5 trillion, this includes loans, leases, and secured contractual cash flows. In addition, structured credit securitizations are ~$4 trillion, so in aggregate, liquid/publicly traded securities (RMBS, CMBS, CLO, ABS) plus Private ABL equal ~$9 trillion! Private ABL managers are in the business of originating senior-secured asset-based loans & leases secured by property at LTV attachment points and DSCR that result in strong asset/cash flow coverage ratios. Like MMLs issued by companies across a wide range of industries, ABL lending is secured by assets across a wide range of sectors that include property, plant, equipment, homes, CRE, receivables, inventory, consumer assets, contractual cash flows, royalties, IP, transportation assets (e.g., aircraft/maritime/intermodal) and more. ABL has always been a huge part of finance, but it’s now come of age as fund managers are building out this business. Asset allocators are re-examining their allocation models for Private Credit, that includes both direct corporate origination funds and ABL funds. ABL is big business for firms like Marathon Asset Management as Edward Cong, Tod Trabocco, CFA, and Bruce (that’s me) are always available to discuss. Critical Point Accelerates Growth: Banks have played a huge role in ABL lending, large global banks, and regional banks alike. Basel 3 Endgame is coming, and banks are adjusting now as they must comply 2-years (2026). Basel 3 Endgame will likely have the same impact for ABL private capital (fund formation) as Basel 3 had for corporate direct lending post-GFC given the new risk capital requirement imposed on the top 30 banks that coincides with smaller banks de-risking. I envision a similar rise in ABL in the coming years, that we saw with corporate direct lending post-GFC. Based upon the need for capital to fill the open void as banks de-risk, the ABL funds business will likely be the fastest growing component within Private Credit. Given the scope of this large, diverse asset class, I expect to see ~12% annual growth for private ABL in the next 10 years, which would make ABL ~$1T Private Credit asset class. The fastest growing component for Private Credit will capture the ABL segments described in Marathon’s pie chart below. This contrasts with Private Corporate Credit direct lending which is currently ~$1.7T and comprised of two segments: Direct Lending (middle markets, lower MML, large loans, and mezz funds) & Distressed/Special Situations (Capital Solutions, DIP/Exit Finance, Distressed/Special Situations Funds); with $1.2T deployed and $500B dry powder, according to Prequin. Capital allocators and their financial consultants are adjusting weightings to include ABL as a core component within their private credit allocation models. TINA, it’s the Golden Era for Credit. What’s your (current/future) allocation to private credit?

TINA, do you hear me? The Private ABL market is ~$5 trillion, this includes loans, leases, and secured contractual cash flows. In addition, structured credit securitizations are ~$4 trillion, so in aggregate, liquid/publicly traded securities (RMBS, CMBS, CLO, ABS) plus Private ABL equal ~$9 trillion! Private ABL managers are in the business of originating senior-secured asset-based loans & leases secured by property at LTV attachment points and DSCR that result in strong asset/cash flow coverage ratios. Like MMLs issued by companies across a wide range of industries, ABL lending is secured by assets across a wide range of sectors that include property, plant, equipment, homes, CRE, receivables, inventory, consumer assets, contractual cash flows, royalties, IP, transportation assets (e.g., aircraft/maritime/intermodal) and more. ABL has always been a huge part of finance, but it’s now come of age as fund managers are building out this business. Asset allocators are re-examining their allocation models for Private Credit, that includes both direct corporate origination funds and ABL funds. ABL is big business for firms like Marathon Asset Management as Edward Cong, Tod Trabocco, CFA, and Bruce (that’s me) are always available to discuss. Critical Point Accelerates Growth: Banks have played a huge role in ABL lending, large global banks, and regional banks alike. Basel 3 Endgame is coming, and banks are adjusting now as they must comply 2-years (2026). Basel 3 Endgame will likely have the same impact for ABL private capital (fund formation) as Basel 3 had for corporate direct lending post-GFC given the new risk capital requirement imposed on the top 30 banks that coincides with smaller banks de-risking. I envision a similar rise in ABL in the coming years, that we saw with corporate direct lending post-GFC. Based upon the need for capital to fill the open void as banks de-risk, the ABL funds business will likely be the fastest growing component within Private Credit. Given the scope of this large, diverse asset class, I expect to see ~12% annual growth for private ABL in the next 10 years, which would make ABL ~$1T Private Credit asset class. The fastest growing component for Private Credit will capture the ABL segments described in Marathon’s pie chart below. This contrasts with Private Corporate Credit direct lending which is currently ~$1.7T and comprised of two segments: Direct Lending (middle markets, lower MML, large loans, and mezz funds) & Distressed/Special Situations (Capital Solutions, DIP/Exit Finance, Distressed/Special Situations Funds); with $1.2T deployed and $500B dry powder, according to Prequin. Capital allocators and their financial consultants are adjusting weightings to include ABL as a core component within their private credit allocation models. TINA, it’s the Golden Era for Credit. What’s your (current/future) allocation to private credit?

TINA, do you hear me? The Private ABL market is ~$5 trillion, this includes loans, leases, and secured contractual cash flows. In addition, structured credit securitizations are ~$4 trillion, so in aggregate, liquid/publicly traded securities (RMBS, CMBS, CLO, ABS) plus Private ABL equal ~$9 trillion! Private ABL managers are in the business of originating senior-secured asset-based loans & leases secured by property at LTV attachment points and DSCR that result in strong asset/cash flow coverage ratios. Like MMLs issued by companies across a wide range of industries, ABL lending is secured by assets across a wide range of sectors that include property, plant, equipment, homes, CRE, receivables, inventory, consumer assets, contractual cash flows, royalties, IP, transportation assets (e.g., aircraft/maritime/intermodal) and more. ABL has always been a huge part of finance, but it’s now come of age as fund managers are building out this business. Asset allocators are re-examining their allocation models for Private Credit, that includes both direct corporate origination funds and ABL funds. ABL is big business for firms like Marathon Asset Management as Edward Cong, Tod Trabocco, CFA, and Bruce (that’s me) are always available to discuss. Critical Point Accelerates Growth: Banks have played a huge role in ABL lending, large global banks, and regional banks alike. Basel 3 Endgame is coming, and banks are adjusting now as they must comply 2-years (2026). Basel 3 Endgame will likely have the same impact for ABL private capital (fund formation) as Basel 3 had for corporate direct lending post-GFC given the new risk capital requirement imposed on the top 30 banks that coincides with smaller banks de-risking. I envision a similar rise in ABL in the coming years, that we saw with corporate direct lending post-GFC. Based upon the need for capital to fill the open void as banks de-risk, the ABL funds business will likely be the fastest growing component within Private Credit. Given the scope of this large, diverse asset class, I expect to see ~12% annual growth for private ABL in the next 10 years, which would make ABL ~$1T Private Credit asset class. The fastest growing component for Private Credit will capture the ABL segments described in Marathon’s pie chart below. This contrasts with Private Corporate Credit direct lending which is currently ~$1.7T and comprised of two segments: Direct Lending (middle markets, lower MML, large loans, and mezz funds) & Distressed/Special Situations (Capital Solutions, DIP/Exit Finance, Distressed/Special Situations Funds); with $1.2T deployed and $500B dry powder, according to Prequin. Capital allocators and their financial consultants are adjusting weightings to include ABL as a core component within their private credit allocation models. TINA, it’s the Golden Era for Credit. What’s your (current/future) allocation to private credit?

TINA, do you hear me? The Private ABL market is ~$5 trillion, this includes loans, leases, and secured contractual cash flows. In addition, structured credit securitizations are ~$4 trillion, so in aggregate, liquid/publicly traded securities (RMBS, CMBS, CLO, ABS) plus Private ABL equal ~$9 trillion! Private ABL managers are in the business of originating senior-secured asset-based loans & leases secured by property at LTV attachment points and DSCR that result in strong asset/cash flow coverage ratios. Like MMLs issued by companies across a wide range of industries, ABL lending is secured by assets across a wide range of sectors that include property, plant, equipment, homes, CRE, receivables, inventory, consumer assets, contractual cash flows, royalties, IP, transportation assets (e.g., aircraft/maritime/intermodal) and more. ABL has always been a huge part of finance, but it’s now come of age as fund managers are building out this business. Asset allocators are re-examining their allocation models for Private Credit, that includes both direct corporate origination funds and ABL funds. ABL is big business for firms like Marathon Asset Management as Edward Cong, Tod Trabocco, CFA, and Bruce (that’s me) are always available to discuss. Critical Point Accelerates Growth: Banks have played a huge role in ABL lending, large global banks, and regional banks alike. Basel 3 Endgame is coming, and banks are adjusting now as they must comply 2-years (2026). Basel 3 Endgame will likely have the same impact for ABL private capital (fund formation) as Basel 3 had for corporate direct lending post-GFC given the new risk capital requirement imposed on the top 30 banks that coincides with smaller banks de-risking. I envision a similar rise in ABL in the coming years, that we saw with corporate direct lending post-GFC. Based upon the need for capital to fill the open void as banks de-risk, the ABL funds business will likely be the fastest growing component within Private Credit. Given the scope of this large, diverse asset class, I expect to see ~12% annual growth for private ABL in the next 10 years, which would make ABL ~$1T Private Credit asset class. The fastest growing component for Private Credit will capture the ABL segments described in Marathon’s pie chart below. This contrasts with Private Corporate Credit direct lending which is currently ~$1.7T and comprised of two segments: Direct Lending (middle markets, lower MML, large loans, and mezz funds) & Distressed/Special Situations (Capital Solutions, DIP/Exit Finance, Distressed/Special Situations Funds); with $1.2T deployed and $500B dry powder, according to Prequin. Capital allocators and their financial consultants are adjusting weightings to include ABL as a core component within their private credit allocation models. TINA, it’s the Golden Era for Credit. What’s your (current/future) allocation to private credit?