Finance professionals love compound adjectives, but lately there’s one in particular that has captured the imaginations of private credit professionals the world over: asset-based.

We are part of this trend. The 9fin newsroom has been talking about asset-based lending as the next great frontier of private credit for months — we’ve covered it on our podcast and in our end-of-year wraps, touching on everything from tax receivables to music rights and even cattle.

Marathon Asset Management hasn’t lent against livestock, but it is taking asset-based private credit to new heights with a deal backed by special cranes used to construct wind turbines.

Here’s a snippet of our recent chat with Bruce Richards, the firm’s CEO and one of its managing partners — produced in collaboration with DealCatalyst, which is holding its third annual US asset-based lending conference in New York this September:

Another growing segment of the asset-based private credit market that we’ve covered in the past is commercial real estate, where a downturn in certain areas of the market (especially offices) is forcing lenders to restructure deals.

As with unitranche lending and significant risk transfer (SRT) deals, private credit’s interest in commercial real estate is partly a reaction to the dynamic between banks and regulators. Here’s Bruce again, explaining why private credit firms are more than happy to pick up the assets that banks have been struggling with:

In the rest of the interview (which you can watch in full below) we touch upon:

• The downside differential between corporate direct lending versus asset-based deals
• The merits of diversified portfolios versus single-asset deals
• What the recent compression in unitranche pricing means for the asset-based market
• How asset-based lending might help private credit firms further penetrate the LP universe

Watch the whole thing below, and register for the DealCatalyst conference if you want to hear more!

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