FireSide: Answering the burning questions around private debt—Part 2

We’re back in the studio with Head of Private Credit Brian Gerson for more cool answers to your burning questions on this key asset class.

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June 20, 2024 | 33 minute read

About this episode

Private debt is a growing asset class that’s increasingly making headlines. That’s why we’re back in the studio with more cool answers to your burning questions on this key alternative.  

Chief U.S. Economist Lara Rhame and Executive Director of Research Andrew Korz join Head of Private Credit Brian Gerson to further demystify the significance, mechanics and potential opportunities in private debt investing.

Transcript excerpt

Lara Rhame: Welcome back to FireSide, a podcast from FS Investments. I’m Lara Rhame, Chief U.S. Economist, and today is the next installment in a series in mid-April. We recorded answering the burning questions around private debt part one, and I got to say the response was overwhelmingly positive. We had an advisor actually call us and tell us it was the best 30 minutes on private credit that he had heard. So this is an asset class that is really important to investors and to the capital markets landscape and private credit has a lot of nuance and let’s face it, it’s getting a lot of headlines right now. So we really felt like it deserved a part two and we brought in an expert, really the expert. Brian Gerson. Brian, welcome.
Brian Gerson: Thank you, Lara.
Lara Rhame: Brian is our head of private credit here at FS Investments. He’s the Co-President of FS KKR Advisor, which manages several BDCs managed by our firm and KKR, and he has over 25 years of experience in credit investing and corporate lending. Really 35 years on Wall Street, right? I mean, not to put an age on the both of us, but we’ve got some business cycles under our belt, let’s say.
Brian Gerson: We’ve seen a few, seen…
Lara Rhame: A few, and I’ve had the pleasure of working with him for six years now.
Brian Gerson: Yes, right about six.
Lara Rhame: Also joining today, let’s say cohosting is Andrew Korz, an Executive Director on the Investment Research team and my regular partner in podcasting. Andrew, thanks for joining today.
Andrew Korz: Yeah, not quite as esteemed a bio, but I appreciate being here.
Lara Rhame: So, Andrew and Brian wrote a great white paper on this asset class called “Awakening: The rise of private debt.” It’s in the show notes among other research and writing on this topic. I’m going to sort of pepper that in through today’s discussion because you may hear something that we’re touching on that we sort of gloss over. But again, so much nuance to this asset class. We would really love for you to dig deeper if you want to, and we feel like here at FS, we’re a partner in education, so that really is reflected by a lot of phenomenal content that we put out on this. So I’m going to lob out the first question to Brian today because I want to use today…this continuing learning…and take off where the first podcast left off where we discussed the $3 trillion asset class and the growth of this asset class, why demand is strong, how it fits into investors’ portfolios. But with you here, I want to dig deeper, like a day in the life of Brian Gerson. So maybe to start us off, you could tell us about your career, your career in credit markets, and really you’ve had a front seat to the growth that this has had over all that time. Yeah.

This information is educational in nature and does not constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment. FS Investments is not adopting, making a recommendation for or endorsing any investment strategy or particular security. All views, opinions and positions expressed herein are that of the author and do not necessarily reflect the views, opinions or positions of FS Investments. All opinions are subject to change without notice, and you should always obtain current information and perform due diligence before participating in any investment. FS Investments does not provide legal or tax advice and the information herein should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact any investment result. FS Investments cannot guarantee that the information herein is accurate, complete, or timely. FS Investments makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.

Any projections, forecasts and estimates contained herein are based upon certain assumptions that the author considers reasonable. Projections are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will vary significantly from actual results. The inclusion of projections herein should not be regarded as a representation or guarantee regarding the reliability, accuracy or completeness of the information contained herein, and neither FS Investments nor the author are under any obligation to update or keep current such information.

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Andrew Korz, CFA

Executive Director, Investment Research

Lara Rhame

Chief U.S. Economist + Managing Director

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