Credit Exchange with Lisa Lee

“It’s a huge differentiator” to have dedicated and experienced personnel to deal with struggling borrowers, says Tim Lyne, CEO of private credit specialist Antares Capital, in the latest Credit Exchange podcast with Lisa Lee. Recent entrants, funds raised in the past five years, often do not.On the M&A front, Lyne doesn’t expect to see a great volume of M&A transactions this year, or indeed in the first quarter of next year. That’s because Antares’ volume on the new business side is average: “if it was going to be great, we would be seeing some of those deals come in the shop already,” he says.Private credit could have financed the $20bn of debt for Electronic Arts, but it would have been a stretch. But that will not necessarily be true for much longer, he observes. “If I fast-forward 3-5 years from now, I think $20[bn] will not be challenging.”There are also too many players, Lyne says, which is compressing fees. With more than $85bn in AUM, Antares has scale, and Lyne says the biggest private credit lenders will continue to get bigger. But for the players in the industry that are not of scale, “it’s going to be incredibly challenging for them to continue to grow over the next five years.”

“Existing investors are probably too long the dollar. They enjoy a very good ride. Valuations are expensive. It makes sense to take profit,” says Grégoire Pesques, CIO, global fixed income at Europe’s largest asset manager Amundi, in the latest Credit Exchange podcast with Lisa Lee.The US, UK, many Eurozone countries, Japan – all have been spending profusely, causing deficits to be a big issue almost everywhere. Describing the fiscal and macro landscape, Pesques details where Amundi, with €2.2 trillion in AUM, is investing. He is buying UK Gilts because the market hasn’t priced in the possibility that growth may slow, and the Bank of England then cuts interest rates.Germany is prepared to turn on the fiscal spending taps, yet will stay one of the safest countries in terms of debt-to-GDP ratios. “There will be a premium for the government that keeps some sort of orthodoxy and has a very strong balance sheet,” says Pesques. There are also pockets of emerging markets that are great investments right now, he adds.There is a big need for diversification away from the dollar and away from Treasuries. But it will take “ages”, he notes, and the rebalancing will be progressive.“It’s always better for a risk-adjusted return to have more diversification in your portfolio,” says Pesques.

“Long-term, I think the game is over from a buyout perspective. I think private capital has won that game,” says Randy Schwimmer, vice-chairman and chief investment strategist at Churchill Asset Management, a leading middle market financing and investment firm with $55 billion in AUM.In the latest episode of the Credit Exchange podcast with Lisa Lee, Schwimmer notes 90% of the leveraged buyouts completed this year were financing by private credit in the traditional middle market space. As for the large-cap deals, the bigger loans that can be multi-billions of dollars in size – while there, too, the majority of LBOs were done by private credit firms, banks have found a way to stay relevant by undertaking refinancings and repricings. Banks also still have significant market share in straight corporate lending and for certain specialist sectors.“It’s a healthy ecosystem right now, where everybody is playing a role,” Schwimmer says.Speaking to banks’ aspirations to create a secondary trading market for private credit loans, that will be difficult, especially in the middle market, Schwimmer predicts. He adds that many have tried. “Illiquidity will still mean something in the traditional middle market,” he says.

“One interesting canary in the coal mine that has not been materially recognised, is the health of the consumer,” says Dan Zwirn, CEO, CIO and co-founder of Arena Investors, on the latest episode of Credit Exchange with Lisa Lee.Zwirn has observed delinquencies in unsecured obligations increase materially, as well as stress in areas like the sub-prime auto market. Original issue consumer lenders are selling off ‘charge-off paper’, which is distressed unsecured debt, at material and elevated amounts.Financial assets are providing the proper signals and indicating trouble in the economy, he says.“What we have seen since the GFC is that the innovation around the thwarting of price discovery has never been more rampant,” he said. “An example of how that touches the consumer is BNPL (buy now, pay later), where certain types of buying don’t necessarily hit consumer credit scores.”But policymakers do have a lot of tools in the toolkit to delay problems, which can stave off a traditional economic crisis. As a result, barring any extraordinary geopolitical events, the market is instead likely to experience a “slow grinding decline,” similar to what Japan experienced with its struggling economy.

“Volatility is now certain. Before, we feared chaos because no-one knew what was coming. Now, it’s priced in” – Alan Schrager, senior partner at Oak Hill Advisors, in the latest episode of Credit Exchange with Lisa Lee.Focus on Treasury markets, advises Schrager. “As a professional investor, what we look at are actually the Treasury markets. They’re sending this signal that there’s this risk inherent,” he says, speaking to the recent rise in long-term sovereign yields of developed countries. “You always think of the risk premium of the US Treasury to be zero. And now that's really what's changed is that there is a risk premium in there.”Schrager also discusses how market volatility, macro risk, and private credit are shaping today’s investment landscape. He sees opportunity in stable companies with stressed balance sheets and notes that private credit spreads have held firm while public markets have tightened.Oak Hill Advisors, which has nearly $100 billion in AUM focused on sub-investment grade corporate debt, is now focusing on trying to provide capital, in either restructuring or refinancing transactions that take decent companies with bad balance sheets and reorganise them.

The likelihood of a September rate cut has edged higher. “They will move ahead with that,” predicts Brad Rogoff, head of global research at Barclays, in the latest Credit Exchange podcast with Lisa Lee.He adds, however, that the market “does need to get used to lower job numbers,” citing what’s currently taking place with immigration and fewer people coming into the workforce. “Just to have a healthy job market, we're not going to have the same job gains as we had.”Rogoff expects inflation to be above the Fed’s target for the back half of this year and into 2026. Chances for a recession in the near term are low, but over a longer time period, perhaps the next two years, the risks are definitely increasing.Fiscal spending will provide some stability as a counterpoint. The yield curve could steepen further and less so than if the US Treasury was issuing in a different way, or if questions around Federal Reserve independence become even more acute.Meanwhile, in Asia, China is going to be a big focus for the rest of the year. “We’ll probably see some stimulative effects implemented in China, but I’m not convinced that there's any bazooka coming,” Rogoff observes. “If we see growth continue to lag in China, that’s probably got to be your biggest focus at this point in Asia.”But a slowing economy is still a positive backdrop for credit and spreads should be tightening, though perhaps not to the degree they have. While Rogoff worries a little bit about the complacency in the market, when he looks down the credit spectrum, markets are proving leery of riskier assets, such as those rated triple C. “It hasn’t necessarily been the rising tide lifting all boats,” he points out.

“We’ve been increasing our exposure to prime office,” says Michael Buchanan, chief investment officer at Western Asset, a fixed income specialist owned by Franklin Templeton, in the latest Credit Exchange podcast with Lisa Lee.New York office property, especially the higher end, is doing very well, Buchanan observes. Also attractive are hotels, lodging, offices, multi-family accommodation and warehouses.Buchanan predicts a record year for commercial mortgage-backed securities (CMBS). “That’s really where our dollars that we have to allocate are going right now. And we probably have one of our highest exposures that we’ve had to CMBS in quite a long time.”On the macro front, Buchanan’s base case is for a temporary pickup in inflation due to tariffs, which will then revert to trending toward – though perhaps not hitting – the 2% target set by the Federal Reserve. The question is really about who will pay for tariffs – and it’s not clear exactly how that will play out.“Watching margins will give us a really good indication if the importers are paying for those tariffs,” Buchanan notes.Western Asset, which has nearly USD 200bn in assets under management, has been trimming their exposure to investment-grade and high-yield credit, due to valuation concerns. There’s still the likelihood of seeing some elevated volatility that will result in some spreads pushing wider. When that happens, it will give Western Asset a better entry point for adding some of that exposure back, Buchanan says.

“From what I could see in our proprietary data, we are seeing a bit of a slowdown,” says Lauren Basmadjian, head of liquid credit at Carlyle, a powerhouse with USD 199bn in credit assets under management, in the latest ‘Credit Exchange’ podcast with Lisa Lee.It's early days, with only about 10% of the portfolio companies that Carlyle lends to having reported thus far. Cautioning that it’s not fulsome data, Basmadjian says that companies are reporting low-single-digit growth in the second quarter, down from mid-single-digit growth in the first. And it’s happening in both the US and Europe.When investing, be conservative right now, advises Basmadjian. For example, leveraged loan spreads have fallen to remarkably low levels, with some at tights not really seen before the Great Financial Crisis. Between the two markets, the European loan market offers better value, she believes.“When I look at the loan portfolios that we could put together in Europe versus the US, you probably capture an extra 60 basis points or so,” Basmadjian says.As for LBOs, Basmadjian says there are more processes going on in the background, but it’s too early to tell whether they’re going to come to fruition. “When pencils went down in April, pencils are back up now,” she notes.“But it takes a while to get the engine going. And we don’t expect to see a lot of new LBO and M&A activity for the remainder of the year. That saddens me to say. But I do think that there’s a lot more in the background, and it just takes a while for it to come to our market.”

“There’s nothing more compelling than live sports,” says Mark Attanasio, co-founder of asset manager Crescent Capital Group, on the latest Credit Exchange podcast with Lisa Lee. The marketplace, now some USD 3tn in size, has the most-watched programs in media, as well as the ability to bring communities together.Attanasio, who is the principal owner of the Major League Baseball team the Milwaukee Brewers, has become the majority owner of the English football team Norwich City. The self-described ‘Ted Lasso’ of English football owners expects to take the team back to the Premier League in three to five years.His advice to others wanting to invest in sports: start by being careful about ego purchases, even as a minority owner. Because it’s not easy to win.There will be trading in minority investments in sports over the next decade or two as that market matures, predicts Attanasio.Turning to credit, the co-founder of Crescent, which is approaching USD 50bn of credit AUM, says he expects to see more private credit loans trading, and that the asset class will “definitely grow to a secondary market.”“All the markets, as they reach a [certain] size, go that way – including, by the way, sports,” he says. “You have a lot of secondary interest in sports teams that trade the NFL,” says Attanasio, who has seen particular minority pieces of US football teams selling for very high valuations.“You’d expect to see additional liquidity in minority investments in sports over the next decade or two, as that market matures. And I think it’ll be good and bad for the market,” Attanasio predicts, pointing to better liquidity, but tighter spreads for investors.

Corporates have showcased resilience in navigating policy shifts, according to Amanda Lynam, Head of Macro Credit Research within the Portfolio Management Group at BlackRock, on the latest edition of the ‘Credit Exchange’ podcast with Lisa Lee.Lynam also noted the surprising resilience of corporates to navigating a higher cost of capital.But she advises monitoring the very important feedback loop – the link between corporate margins, the labour market, consumer spending, and overall economic activity and growth. “Right now, we are pretty constructive. Would characterise it as cautiously optimistic, but that could change very quickly – just like we’ve seen in other episodes,” Lynam said.To effectively monitor that feedback loop, investors should focus on the high-frequency commentary coming from corporate management teams. “That was instructive during the pandemic, about the true length of supply chain disruptions, which was actually much longer than many market participants and economists expected,” she said. “And I think it will be informative in this environment as well, both positively and negatively, about how corporates can navigate this environment. So that’s the one thing that we are watching.”Lynam makes a bit of an out-of-consensus call – selectively move down in credit quality in spite of the policy uncertainty and the residual overhang from that. Oftentimes, in an environment like this one, the automatic reflex action is to generically move up the ladder in quality. “Actually, that may not be the right call this time around,” she said.At the same time, she doesn’t advise chasing all the way down the risk spectrum, into those pockets of the market that were already under pressure. “We wouldn’t be chasing all the way down to triple Cs,” she said. “But, for example, investors that are concentrated on the investment-grade market, we like moving down into the triple B pocket of that market – because, in our view, that’s an opportunity to pick up some additional spread, some additional risk premium, but not compromise too much on credit quality.”“I actually think being a bit more opportunistic and not shying away from credit risk, but taking it in a selective way, is the right call,” she observed.Investors can also capture some pretty attractive all-in yields in European corporate credit, she added, while the European corporate credit market also has some pretty favourable technicals.But with that said, Lynam doesn’t see a wholesale reallocation from US dollar-denominated assets into Europe. “The case for American economic growth, productivity, the private markets in the US, for example, funding innovation – I think that’s a really compelling story.”

“I’ve continued to see large investors, both on the individual side [and] on the institutional side, continue to rotate their portfolios into fixed income,” said Wayne Dahl, co-portfolio manager of global credit and global credit investment grade strategies at Oaktree Capital Management, on the latest edition of the ‘Credit Exchange’ podcast with Lisa Lee.Economic growth will slow, forecast Dahl, noting the challenges from tariffs and their impact on inflation, consumer sentiment, and the job market.“We have to be eyes-wide-open to the fact that maybe some of those real positive factors in the first half might not have the same impact in the second half of the year,” he observed.But that’s a good environment for credit. Despite credit spreads being near their tights, the sub-investment grade segment remains at a pretty attractive level, Dahl said. Investors can earn in the sub-investment grade credit space what some people would consider almost equity-like returns, but with less risk and less volatility.High yield bonds, leveraged loans, structured credit such as CLOs, CMBS, RMBS – all these earn above seven percent. “And that’s a pretty good-trade-off for portfolios, to lock in that coupon, [to] be able to de-risk your portfolio, [and] still meet your objectives,” Dahl said.That being said, Dahl cautioned there is stress building, pointing particularly to leveraged loans. “I think, as an active manager, that’s something you’re keenly aware of,” he said.

“We've done our first trades and some of the first trades in the industry in investment grade private,” says Matt Eagan, who heads the full discretion team at Loomis Sayles and oversees USD 80bn of AUM, on the latest edition of the Credit Exchange podcast with Lisa Lee.Eagan, who sits on the asset manager’s board of directors, likens investing nowadays to Ozzy Osbourne’s song Crazy Train. Structural changes including the ageing of the workforce, the heightened need for security, and the growing US fiscal debt are inflationary factors, and should change how one conceptualises investing, says Eagan.Credit is a good investment right now, Eagan notes. However, rather than looking at spreads, which are currently tight, Eagan advises focusing on the risk premium.“People remember episodes where credit has been very tumultuous because that’s where the excesses were,” he says. “Today, they’re not there. The private credit market has derisked the public sector. The private credit market is a behemoth that’s almost become the mirror image of the public markets.”Private credit will evolve including a huge portion of the market becoming more liquid. Loomis has bought private investment grade credit in the secondary market. It has also co-mingled private credit into its public portfolios, including mutual funds. “We’re not the only one doing this,” he says.“I think investment grade privates will be one of the biggest ones that'll get to this point, where you’ll see much more secondary market activity.”

“We know there’s a big pan-European need for financing,” says Mathew Cestar, president of Arini, one of the fastest growing alternative credit managers, on the latest edition of the Credit Exchange podcast with Lisa Lee.Cestar, who has more than 25 years of experience in European credit markets and once headed a major investment bank, details the evolution of capital markets in the region, from high-yield bonds to leveraged loans and now, private credit.“European companies have never really had a love affair with public capital markets, largely in the sense that they are cookie-cutter and often volatile. Many of these companies, particularly at the mid-size [level], tend to be family owned, multi-generational, and private – they require something much more bespoke, relationship-driven and meaningful,” he says.Via lending to the ‘real economy’, Cestar sees a significant opportunity across various sectors in Europe to go beyond lending to companies owned by private equity shops. And he discusses the recently-announced partnership Arini inked with Lazard – the first private credit and bank partnership of scale in Europe.“As global pressures apply, we’re seeing not just M&A activity rise, but essentially the streamlining and reshoring of European businesses, and so there’s ample opportunity for capital investment to facilitate that,” notes Cestar.

“We’re at a reasonable balance now.” That’s the view of Stephen Ketchum, founder and CEO of Sound Point Capital Management, regarding the state of credit markets in June on the latest edition of the ‘Credit Exchange’ podcast with Lisa Lee.Sound Point, an alternative asset manager with over USD 43bn in AUM, de-risked its portfolio earlier this year, when the firm felt there was a little bit too much optimism. It then added risk when sentiment skewed toward an excess of pessimism in April.“We are in a world where there’s been a real paradigm shift in the way that our economy works,” Ketchum said, on the fading worries about an impending recession sparked by the ‘tariff tantrum’. The US in particular, but the developed world more generally, have moved on from what was, decades ago, a manufacturing economy with somewhat-predictable economic cycles. The US is now overwhelmingly a service economy, Ketchum said. Because of that, the last 15 years has seen two recessions, both of which were “self-inflicted”.Tariffs will be a factor going forward. While Ketchum doesn’t expect that the US will impose 50% tariffs on friendly countries, there will continue to be negotiations, “so we’ll be prepared to manage through that,” Ketchum said. “The companies that we lend to will be prepared to manage through that.”But for its private credit book, Ketchum could neither de-risk, nor add more risk. The most important thing is to underwrite for years, make sure one backs companies that have high barriers to entry in their market, and most importantly, have management teams you trust will be able to pivot when they need to, he advised.

While private credit broadly has showcased resilience and strength, “under the surface, not everything is as rosy,” according to James Reynolds, global co-head of private credit at Goldman Sachs. Reynolds spoke with Lisa Lee, managing director at Creditflux and editor-at-large at Debtwire, at this year’s Debtwire Private Credit Forum Europe in London on 17 June.Goldman has started tracking the debt-to-equity swaps in the industry because LPs around the world wanted to know what is really happening. Since 2017, the European direct lending market has seen around 120 debt-to-equity swaps across the industry – and interestingly, around half that number have occurred in the last two years.They tend to impact deals involving smaller companies from 2017, 2018 and 2019, and in more cyclical sectors such as consumer, retail and discretionary, Reynolds noted.That is resulting in real bifurcation in European direct lending. “You are going to start seeing dispersion in performance – it’s happening,” he said. “The question now that LPs should be asking is: what are the capabilities of direct lenders to go and own these businesses? It’s a different job than lending to a business.”Certain teams are going to come under pressure and there’s going to be more consolidation in the industry – indeed, it is already occurring. The landscape in direct lending in ten years’ time is going to look very different to today, with, in all likelihood, fewer, larger players, Reynolds said.

The mood at the Global ABS 2025 structured credit industry confab this week was positive, according to bankers, asset managers and investors at the Barcelona conference. Taped (mostly) live in Spain, Credit Exchange host Lisa Lee caught up with guests from Bank of America, hedge fund King Street, Blackstone and Federated Hermes.Alex Batchvarov, managing director, global research at Bank of America: When we take a look at the macro picture, there are certain changes which are gathering speed, and I think to some degree – maybe to a large degree – are irreversible.The capital flows are changing direction. US exceptionalism is now being questioned.[For] the structured finance sector, there are not many reasons for concern with regard to credit performance or structures or documentations.Young Choi, global head of trading at King Street:The tone was relatively constructive. There seems to be a preference from the crowd in Barcelona for European credit versus US corporate credit.A couple of years ago if you asked that same question, it would have been reversed. There were a lot of things that concerned people about Europe. It hasn’t completely flipped, but I think the narrative has definitely changed.Alex Leonard, senior managing director and head of European liquid credit strategies at Blackstone:We're definitely seeing a lot more investors coming from wider locations. Previously it would have been primarily European-only. We’re now talking to Asian investors, Canadian investors, African investors, all wanting to discuss that opportunity in Europe with Blackstone. So I think that’s positive.We do clearly need to remain cautious, but certainly, looking at the fundamentals and the real data we’re seeing across all of our portfolio companies, we generally continue to feel good about European credit.Andrew Lennox, senior portfolio manager at Federated Hermes:There's a lot of issuance in the pipeline, both on the ABS side and the CLO side. We’re going to have a busy post-conference period.We’re starting to see some early signs of a pivot away from the allocations toward the US and investors looking for opportunities elsewhere, and Europe seems to be a beneficiary of that. It seems that Europe is picking up some momentum, whereas the US had it for a number of years. The US may be seen as a less reliable trading partner, but also as an investment opportunity.

The M&A market is normalising, said Matt Theodorakis, co-head of European direct lending at Ares, in the latest ‘Credit Exchange’ podcast, recorded at the SuperReturn International conference in Berlin, Germany.“People are looking to do deals going forward” after taking a pause following ‘Liberation Day’, Theodorakis told host Lisa Lee, managing editor at Creditflux.Investors – limited partners – are going to want to get paid back. In the next six to twelve months, their patience is going to wear thin, Theodorakis said. “People are going to really start to push and say, ‘Hey, guys, enough. There’s no reason not to start a sale process.’ We’ll actually enjoy the benefit of that.”Before that, 2025 started out as a strong year. Direct lending in Europe has been deploying almost 50% more than a year ago, and the use of proceeds for M&A has been increasing. Theodorakis is particularly extied about how artificial intelligence can impact the private credit business, particularly from the perspective of risk management. As a lender, Ares gets quality and frequently-updated information on their borrowers.“We’ve been doing a pretty good job of it, but if we can turn that info into machine learning [and] getting ahead of trends, that is an absolute game-changer.”

Investors aren’t being paid enough a premium for the risks in US corporate credit, said Bryan Whalen, chief investment officer of fixed income at TCW, on the latest ‘Credit Exchange with Lisa Lee’ podcast.Whalen, who oversees USD 180bn in fixed income assets, contends investment-grade corporate credit spreads should be paying 50% more than they are. Investors should be getting 120 basis points of spread for IG bonds, but today they are getting paid close to 80bps, Whalen said.During the April volatility, there was a repricing of credit risk, but it didn’t lasted long enough to call the markets broken. But markets aren’t out of the woods, and it’s on the list of possibilities this year, according to Whalen. There are a lot of things that could cause volatility and if the Federal Reserve seems reluctant to rush to rescue markets, “you might actually see the market is broken because of the lack of liquidity,” Whalen said. “And it will stay broken, and that will magnify the downturn.”While Whalen likes being underweight corporate credit, he sees attractiveness in parts of the securitised market – mortgage-backed securities in particular, because some buyers that have traditionally been in the space have temporarily pulled back. Moreover, while Whalen doesn’t like US high yield bonds, he does like some high yield bonds in emerging markets. Asia has the potential to outperform relative to the rest of the world. On European growth prospects, markets may have gotten a little ahead of themselves on the narrative of a fiscal spending boost, and taken a pause on the approach of what Whalen describes, tongue-in-cheek, the “exporting of exceptionalism.” Still, there are some good opportunities in euro-denominated investment-grade corporate bonds, where investors get paid a decent amount of additional spread for the same company in a euro currency versus US dollars, he noted.

“Look at credit markets, they behaved quite differently this time,” said Eddie O’Neill, co-head of global liquid credit at KKR, about the period of volatility that whipped global financial markets in April. “They were very stable.”When equity markets were volatile, credit markets did see some selling off but in a very orderly repricing of risk. There was “no blood in the streets, no sustained buying opportunities,” O’Neill told host Lisa Lee at the Creditflux CLO Symposium 2025 in London. That there were three reasons: 1) the nature of the shock, which is policy driven, would take time to play out and the end result of it is still fairly unknown; 2) credit markets have matured in the last five years with new pools of capital becoming more significant; 3) the markets have been starved of assets and been technically driven through 2024 and 2025 with money on the sidelines waiting to step in.The European credit markets are more stable than the US, contended O’Neill. There is no significant ETF buyer base in Europe, the fundamental health of European corporates is pretty good, and Europeans have had the political realization that they need to turn things around. It's not without risk as maintaining political cohesion in Europe is difficult. Europe still has an Achilles' heel---energy costs and demographic will be a challenge. KKR is generally more bullish on Asia, said O’Neill. Despite the tensions between the US and China and slowdowns in the Chinese property market, Asia has the potential to continue to be a big driver of global growth. Asian credit will become a very big market over the next number of years, and investors should be looking at the region, he said. In particular, the investment grade credit market in Asia currently delivers significantly greater returns with lower defaults and loss rates compared to the US investment grade market.

People fail to give the private equity funds the credit they deserve, said Susan Kasser, head of Neuberger Berman Private Debt, on the latest ‘Credit Exchange with Lisa Lee’ podcast.Whilst in terms of investment opportunities, it has been a less productive start to the year, private equity funds have found interesting investment opportunities. Neuberger Berman has already committed to financing a number of new leveraged buyouts this year. There are a surprising number of companies that appear to be quite insulated from tariff exposure and are pretty recession-resilient as well – to a much greater degree than might have been expected, Kasser said.The beauty of a portfolio of privately-held, privately-negotiated, untraded loans is that concerns, volatility and market sentiment don’t really affect the loans, Kasser told Lisa Lee, managing editor of Creditflux. Rather, the only thing that does impact the loans is the fundamental performance of the companies being lent to. “That will take some time to figure out, but it looks like all should be well,” Kasser said.Kasser noted that an element of the underwriting that people miss is the importance of the private equity sponsor. They have three advantages in fixing a problem. These encompass control (they can make any change they want to), time (they don’t have to exit at any point in time), and capital (they have capital to support existing investments). A lot of problems, including things like recessions, tariffs, inflation, supply chain issues, and higher interest rates, are, to some extent, temporary and fixable, Kasser said.Neuberger Berman passes on many financing deals, even those that may look like good opportunities. “You just need to decide which way you want to err. And we have consistently decided we want to err on [the side of] capital preservation, margin of safety, zero mistakes for the investors,” Kasser said.