Howdy! The 9fin team is back from DealCatalyst’s signature private credit shindig, this year from Nashville.

In between the honkey tonks and the spareribs, we found time to meet with a slew of industry players and Shubham even found time to moderate a panel on the Tuesday.

Now that the dust has settled and the country music has stopped ringing in our ears, here are four things we heard throughout the event that were top of mind:

1. Tariffs, Tariffs, Tariffs

Before most attendees even made it onto the conference room floor on 12 May, the US government had already announced that the tariff landscape had once again changed: A deal with China, contemplating a 90-day partial suspension of tariffs, had been struck and some sighs of relief could be felt.

The topic still dominated conversations and panels as GPs and LPs tried to make sense of what some of the effects it is having on portfolios. It’s still early to figure out the full effects, Chris Gizzard, a partner at consultant Bayshore Capital said on a panel, but he did note that two clients — a large car dealership and a building and construction company — had both seen effects from the policies.

“It hasn’t really moved the yield for us,” Gizzard said about the tariffs. “But it really is on our mind for everybody.”

Workout and restructuring desks are bracing for more activity. The uncertainty around which tariffs will stick and which will be resolved, however, puts people in a bit of a bind on what to actually do.

Alex Cota, a partner in Paul Hasting’s restructuring practice said that once there is more certainty, we will see various processes being launched as well as some restructurings actually happen. Until then a lot of direct lenders holding loans that are struggling are asking a similar question.

“Why start actually doing the workout?” he said. “In a lot of situations you do the band aids and set milestones down the road.”

2. Courting? Perhaps not

Speaking of restructuring, out of court solutions increasingly rule the day for private credit. A lot of it is down to costs on all sides.

“It has become prohibitively expensive,” one restructuring practitioner said on a panel. “Ultimately pushing lenders in that direction.”

We have started to see more attempts at restructuring in recent months on private loans (see IDG’s restructuring as an example). Multiple people said we will likely see more, we just don’t know when (see above).

Another way this is likely to play out is lenders becoming the owners of businesses. The current macroeconomic climate has left some companies and lenders no choice in the matter.

“They have to yield because they don’t have a backup plan,” a restructuring lawyer said. “They don’t have a plan B.”

3. The Terminator

There are a few sectors that are synonymous with private credit. Business services, healthcare and HVAC businesses seem to consistently come up. Few are as popular as software though, with sticky customer bases and high multiples leaving room for chunky debt loads.

This may be primed to change however with the advent of AI. At least that’s what Bruce Richards, CEO of Marathon Asset Management thinks.

“AI is going to be incredibly destructive to software,” Richards said.

The comparison he drew was from Blockbuster Video to Netflix. Those old enough to remember Blockbuster’s complete destruction at the hands of a technology company know what that means. Richards said that when AI does this to certain software companies, there might not be zero recovery value but it’s likely to be in the 10-20 cents on the dollar range.

For those ready to panic, he does note it’s not likely to happen to some of these software companies this year, or even next. But it’s time to start being wary of a five-to-seven-year term loan if there is any risk of a business being usurped or upended by AI.

He warned that some lenders have up to 50% exposure in their portfolios to software and even a few businesses being hammered can hit returns. Time will tell on how many advances in AI come in the future but lenders, who are worried mostly about downside protection, should start preparing for an uncertain future.

“You don’t want to see any zeros or major losses when you lend,” Richards said. “The risk is so high for AI.”

4. Expanding the universe

Conversations around private credit fundraising have been strange to start 2025. Most people still talk about a difficult fundraising environment but then you get news about large closes, niche firms doubling their targets, and large managers seeking $2bn+ for focused funds.

One consistent trend in how to access more capital is through the retail channel. There was some chatter about a couple of big regulatory wins for the BDC universe. One related to more flexible co-investment relief and another around different share classes and fees. For better or worse, the administrations haphazard dealings in a number of government agencies including the SEC seems to have produced some good in the eyes of the private credit industry.

“It’s fear of the SEC staff members losing their jobs. It’s fear of the SEC staff members not being able to list one or two things they accomplished when they respond to emails from DOGE,” a wealth manager said. “That really drove these two pretty big regulatory wins.”

Both changes (which were announced in April) expand the universe of those able to participate in private credit and how they want to invest in the asset class. While it is perhaps not the scale of the deregulation hoped for by the market to thaw out the M&A markets, it should help simplify the process for more retail investors to access an asset class still in its golden era.

Will you be joining us at next year's conference? You can check out the agenda and secure your ticket here.