Alternatives Access: Navigating the Modern Private Credit Market

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A shimmering strip of gold-plated handwriting swirls elegantly across a dark surface. It spells JP Morgan. A woman with long dark hair wears a black turtleneck and textured jacket. She sits at a table with a glass in front of her and wears a ring. Large windows behind her reveal a city skyline with tall buildings. Text: Jasmine Green-Hogan, ALTERNATIVE INVESTMENTS SPECIALIST, J.P. MORGAN PRIVATE BANK.

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Hello, everyone, and thanks for hopping on. My name is Jasmine Green, and I'm an alternative investment specialist here at the JP Morgan Private Bank. And we're back for another episode of Alternatives Access, where really we're trying to bring you the latest insights across private markets.

There is so much to talk about. We are in such a great inflection point across private markets, whether it be from ideas and strategies, as well as structures and ways to get implemented. And today's topic is not new to most of you, but hopefully will be insightful across the private credit markets.

There is no one better to be joined by than Michael Smith, who's a partner and co-head of the Ares Private Credit Group. 25 plus years of investing across the private credit spectrum, and a really great partner to the JP Morgan Private Bank. So, Michael, thanks for joining me.

Thanks for having me.

I think it's going to be a great episode.

I do, too.

So

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Michael sits beside Jasmine at the same table. He has short gray hair and wears a black suit and white shirt. Text: Michael Smith, Partner, Co-Head Ares Private Credit Group.

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that being said, let's just dive in. Our goal is really to bring everyone who's listening five ideas, five things to really take away in the next 25 minutes. I think the first place that we can naturally start is, in a world where there are more blurred lines between public markets and private markets, companies truly are just looking for capital.

And they can do that publicly. They can do that privately. They can do that through equity or debt. And I would love for you to walk us through that debt piece, particularly on the private side. What is private credit, for anyone who's maybe starting from scratch today?

Great. Private credit's been my life for the past 30 years. We've helped develop the asset class, and very excited to talk about it for those that are new or just listening to see what's going on the market.

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Slide: Private markets can unlock middle market investment opportunities. Private credit and private equity offer complementary access to middle market companies, enhancing portfolio diversification and return potential. A chart titled Illustrative Capital Structure shows three stacked blocks. The top block labeled Senior Debt ranges from twenty five to thirty five percent. The middle block labeled Junior Debt ranges from fifteen to twenty five percent. The bottom block labeled Equity ranges from thirty to fifty percent. The top two layers belong to Private Credit and the bottom layer belongs to Private Equity. A second diagram titled Illustrative Financing Transaction presents relationships between a Private Lender, a General Partner, and a Middle Market Company. One flow moves from the private lender to the company as principal funding, and a return flow moves back as interest and principal payments, described as an income solution for investors. Another flow moves from the general partner to the company as capital and business acumen, and a return flow moves back as equity value and earnings growth, described as capital appreciation for investors.

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For me, private credit can mean a lot of different things. But I think most simply put, private credit is capital that we lend to a company. So clear distinction that we're lending, and we are putting in a contract in place where we get interest and we get repaid our principal and it's a defined set of time, versus private equity, where you own the company and you're looking for more of a long-term growth opportunity. Potentially higher returns, but again, not that contracted income or repayment of your principal.

And I think what's helpful, too, about what you laid out, one, that's super clear, just as far as what's actually taking place. I think oftentimes, people think private credit is a new asset class or a new industry, when in reality, there's a subset of companies that have always looked for private financing because they weren't able to tap into traditional lending from banks. Will you spend a moment just there on sort of, one, what type of company would use this and look for this, and the opportunity set there?

Yeah, I think there's a little bit of a fallacy in there about what it is also. We're actually lending money to great companies. I think that's a nice thing to start with. And why would that company come to us versus a bank? Well, two things.

One, there's been a secular change within the banking markets and the institutional banking market, where they've kind of moved upmarket and focused their lending activities to really the larger companies-- think Fortune 500 companies, large enterprises, global enterprises, et cetera-- which has left a void for middle market companies. Again, high-quality businesses that we've actively sought out and lent money to.

The second big secular trend has been the growth in private equity. So mentioning those investors that are looking to buy companies are looking for more flexible capital. And I think that that's a nice place to start with private credit, is that we provide a flexible solution.

It's a bespoke loan that we get to negotiate the credit agreement, but we can customize that to the growth objectives of the company, and then maybe the private equity firm that owns them. And so we might be able to help them buy another company eventually, or provide capital for growth, build a new facility, build a new product and distribute that. And so our partnership and relationship orientation has become a real key component, especially within the private equity community, as you think about private credit.

Sure. And I think, too, what you're describing is all of the reasons why a company would want this-- speed, certainty, flexibility, and also that bilateral relationship around negotiating around this. And I think one of the things that we haven't had a chance to hit on yet is just this idea, from a structure perspective of this asset class, companies are choosing to stay private longer.

And so naturally, in the spirit of looking for financing, whether it be equity or debt, there's just a larger opportunity set, one, from those companies choosing to stay private longer, but also the fact that, as we walk around the world today, most of the companies we frequent use and create both services from a user perspective or from an investor perspective are privately held. So there's tremendous opportunity even simply from a volume perspective.

You nailed a great point. Companies are staying private longer because private equity and private credit are there to help them achieve their growth opportunities. There are 200,000 middle market companies that are looking for capital, private credit, private equity. And again, they're able to stay private longer, achieve their growth objectives, and then maybe later on in the lifecycle, look at a public offering or something like that to access more capital.

Sure. So that was perfect for idea one. If we pivot to idea two, we just hit why a company would explore private credit. I'd

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Slide: Direct lending can offer a number of potential benefits to investors. Direct lending offers compelling investment attributes vs. other fixed income products. A panel titled Potential Benefits to Investors lists four statements. One statement reads Income oriented and floating rate portfolios that embed value and act as a hedge to rising interest rates. Another statement reads Lower correlation and lower volatility to traditional assets enhancing portfolio diversification. A third statement reads Enhanced documentation and robust portfolio management to help mitigate downside risk. A final statement reads Historically low defaults with higher recovery rates. A bar chart titled Annualized Return Comparison Since 2015 compares several investment categories. The tallest bar represents United States Direct Lending with an annualized return of nine point three percent. Lower bars represent United States High Yield Corporate Bonds at six point one percent and United States Leveraged Loans at five point six percent. Smaller bars represent United States Investment Grade Corporate Bonds at three point zero percent and United States Aggregate Bonds at one point seven percent. The chart shows a downward trend in returns from direct lending toward more traditional bond categories.

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love for you to take us through why an end investor should be potentially thinking about adding something like direct lending and private credit to their portfolio.

And then on top of maybe the why, also identifying what are the risks we should be thinking about when adding this to the portfolio. Private credit isn't a one-to-one swap for traditional fixed income. It is an extension of risk, in some way. So maybe talk us through both ends of that spectrum.

Yeah. So again, thinking about those secular changes, there's been a nice growth opportunity within the private credit community. And as investors look at that, they're saying, OK, I can partner with a manager that's originating these loans, build a diversified pool of those assets. They collect their interest.

So I think the interest payments that then get passed on to investors through funds and vehicles is a key component of that. You trade that off with illiquidity. So I think investors need to that these are illiquid assets. But there's also less volatility.

So even though a loan is structured, potentially, to be floating rate, it could be senior secured, and a lot of attributes that we like about it, it is still an illiquid loan that is bilateral with the company. And we do that. But again, the investors then get access, A, to the middle market, which no one's really focused on except for private credit, as banks have moved upmarket. And you can build this diversified pool of income-producing assets that we can pass on, then, to our investors.

Would you just spend an extra moment on, one, what you're describing from a floating rate perspective, and why is the end investor that's meaningful in a portfolio, either in a higher interest rate environment relative to history or an environment where maybe rates potentially come down? I know that's probably not at the moment what the Fed has been alluding to, but just thoughts on the floating rate component.

Yeah, I think what it does is it allows us as a manager to match our liabilities to our securities so we don't get offside. So if we borrow against the portfolio, it is going up and down. But those interest rates then move up and down, and so you're not in a position where there's mark to market risk on those lines like you would see in a fixed rate bond market.

And so with the floating rate interest rates, typically what we do is we're floating rate, senior secured. And then we have added protections behind that in the loan documents that we're making with our borrowers that are bespoke or customized to the business. So we're able to get collateralized by intellectual property. If they have real estate, we can grab that as security.

We can dictate how cash flows come in and either repay our loans, or we can customize them about how those cash flows then can be used to grow the business. But a lot of customization, a lot of flexibility, meaning making sure that we protect our loans. But that variable rate interest allows the buyer of that security in order to get a fair compensated for what's going on the market.

Sure. And if we plug that, one, the benefits, but also the risk, you pour that into a single investment or asset class, direct lending today. If we press forward to idea three, I think what I'd love to bring to life is for all of our clients or clients who are thinking about adding to their portfolios in private markets, they've got a traditional sort of stock and bond portfolio. Maybe it's a 60/40 or a 70/30. When you think about portfolio construction, how do you think about legging into something like direct lending in a broader portfolio?

Yeah.

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Slide: Diversification and attractive risk-adjusted returns. An allocation to U.S. direct lending may provide an alternative source of return with a differentiated risk profile. Three panels present statistics, a risk return chart, and an asset correlation table. The left panel lists key figures for United States Direct Lending. Text states nine point two eight percent returns since twenty fifteen through market cycles to the present. Another line states two point eight two percent risk measured by standard deviation over the same period. A final value states zero point three zero average correlation to loan and bond indices. The center chart titled Historical Risk and Return Matrix since October twenty fifteen plots time weighted return against risk measured by standard deviation. United States Direct Lending appears at relatively low risk and the highest return among the categories. Leveraged Loans appear at moderate risk and moderate return. High Yield Corporate Bonds show higher risk with slightly lower return than direct lending. Investment Grade Corporate Bonds and Municipal Bonds appear at lower return levels. United States Treasuries and Aggregate Bonds appear at lower returns with varying levels of risk. The right panel titled United States Direct Lending Asset Class Correlation Matrix lists correlations with other asset classes. Leveraged Loans show a high positive correlation. High Yield Corporate Bonds also show strong positive correlation. Large Cap Equities, Real Estate Investment Trusts, International Developed Market Equities, and Commodities show moderate positive correlation. Investment Grade Corporate Bonds and Municipal Bonds show weaker positive correlation. United States Treasuries show a negative correlation.

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So again, obviously talk to your financial advisor about this.

Of course. Always.

But from our perspective, we very much love the alternative market. Again, illiquid, so if you have 40% bonds and 60% equity, most of those securities will trade on indices. And so you can get in and out of them. As a portion of that, so if 10% were in alts and 5% was in credit versus equity, we think it's a nice complement to your liquid, publicly traded fixed income securities.

And I think what's interesting there, too, it's nice to put them side by side, because I think one thing that you're describing is there is a tradeoff. You don't get nothing-- or you don't get something for nothing.

Sure.

And so that premium that you get on potential return from either traditional fixed income or cash, even, for a lot of clients who may be thinking about just stepping into the market for the first time, you are giving up the liquidity. I think what's helpful to underscore here is, historically, what private credit has done relative to traditional fixed income, high-yield bonds, so on and so forth, just so everyone has an understanding of what happens in public markets versus what's happening in private markets.

Private lenders are directly originating their loans. So a high premium for building those relationships with the private equity community, building those relationships with bankers, brokers, and lawyers who have access to middle market companies that are seeking private credit. So when we go and interface with them, they're paying us an origination fee, which we pass on to our investors. So that's one component of it.

And then as we're able to customize their loan, a borrower might come to us and say, hey, I want to borrow some money in order to do an acquisition, but I need a patient, relationship-oriented lender that will let me spend a year integrating that businesses. I'm not sure how it's going to go. I need to integrate my teams. I need to hire more people. I need to get my product to different outlets.

And earnings might be flat. Earnings might not immediately grow. And so we're willing to pay a little bit higher interest rate in order to have that flexibility. That might lead to other acquisitions. That might lead to the need for additional capital. And again, having a private lender that's your partner in order to do that allows you to chase that.

So again, by originating that loan, getting upfront fees, and then being patient, our borrowers and our private equity firms are willing to pay us more to be that partner. We pass all of that on. So again, a bond that is liquid in trades, the banks are trying to achieve the lowest yield for that company based on the credit worthiness of it.

It's a little bit different in our markets. And that's the alpha that we generate. So again, looking at your portfolio, you should be invested across that entire spectrum, but the private credit piece is a really nice enhancement to your fixed income portfolio, albeit while giving up some of the liquidity that you might otherwise have.

Sure. The thing that I want to dig in a little bit on what you said is this idea around you have more flexibility, one, as the lender, but also as the company when you're entering into a sort of bilateral loan or private credit here, what we're talking about as far as direct lending. What I think is interesting is, in private markets, you have a longer runway and a window for companies to achieve growth, in private equity and private credit.

And I think, again, to our earlier comments just around companies choosing to stay private longer, you have this really nice opportunity to invest in innovation, to invest in growth, to invest in companies that very likely could be household names later, or who are household names today, just happen to be privately held. So for our clients who are looking for diversification across companies that exist today, this is also a place where, again, you're just tapping into companies that necessarily aren't publicly traded. So I think this can be pretty compelling.

Yeah, and the nice part about that also is we get to do lots of work on the companies. So those opportunities are brought to us, like I mentioned, predominantly by private equity firms that have a vision for that growth, for that innovation, or from bankers or brokers that say, hey, we have a borrower that's looking for X amount of capital in order to do this, typically for a purpose.

We spend three, six, nine months helping that private equity firm diligence the company. So we get intimately involved, not only on what's the downside I have-- so I'm making a loan. My loan is X amount of dollars, and it's at 30%, 50% loan to value of the business. That should provide some downside. But then what are the growth plans? Help me understand them. Is that going to make it easier for you to pay back my loan? And do that.

And so again, all of the primary work in that origination and the diligence is much more detailed, and really separates, I think, private credit from what you're seeing in the larger, more liquid markets. And part of the reason is that the banks are focused up there is they are household names. They've been diligenced time and time again, and they are credit worthy, or they're credit rated. A lot of these companies, we spend a lot of time getting to know the management team, getting to know the business, the industry, and everything that's going on within both the business and the industry before we make an investment.

Sure. I can tell you love the companies that you work with because this is where you just lit up. And so excited that, one, to hear from somebody who's been in the direct lending space for so long that that's the type of diligence and level of connectivity and relationship that goes into the companies that are getting loans underwritten to them. So that's really interesting to hear behind the scenes on.

If

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Slide: Private credit headlines raise concerns, but the data tells a different story. Non-accruals and company fundamentals point to a resilient credit environment, signaling dispersion rather than overall market disruption. A panel on the left presents three news quotations about economic concerns. One quote reads Will First Brands and Tricolor bankruptcy spell the beginning of a wider crisis in the U.S. financial sector, credited to The Economic Times, October 2025. Another quote reads How Bad is Finance’s Cockroach Problem? We are About to Find Out, credited to The New York Times, October 2025. A third quote reads Consumer Confidence hits lowest point since April as job worries grow, credited to CNBC, November 2025. A line chart titled Annualized Return Comparison Since 2015 tracks total loan value on non accrual over time. One line represents non accruals at cost value and another represents non accruals at fair value. The cost value line rises to a peak around 2020 before trending downward and stabilizing near 1.4 percent. The fair value line peaks around 2020 and later declines toward about 0.7 percent. Horizontal reference lines indicate a ten year cost average of 1.9 percent and a ten year fair value average of 0.9 percent.

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we press forward to number four-- and I'll be curious if you light up here, as well-- we could not talk about private credit today without addressing some level of the headlines that are out there. I think one of the things that I want to dissect in this moment is, one, how much of this is just noise around a maturing asset class, and how much of this we should be thinking about embedded or risk that maybe you've already underwritten and what you're taking place in the underlying portfolios. A lot of our clients may be new to private credit, or again, just existing investors who wanted an update. But it would be helpful for you to bifurcate noise versus real risk, and just how you're thinking about the headlines more broadly.

Sure. Lots going on the market. So I don't know if I'm going to light up because we've been talking about it ad nauseam, but it is an exciting time to be thinking about these issues. And I believe right now there is a slight disconnect between what you're reading in the press and what we're seeing in the historical performances of the company.

I am not going to say there aren't risks and future events that could change the economy or the behavior or performance of a business. And we'll get to that. But right now, we're actually seeing an incredibly healthy US economy and an incredibly healthy portfolio, with companies in portfolios across direct lending generating double-digit revenue and EBITDA growth. It hasn't been really quiet for the last 18 months. If people remember, we went through an election. We went through the advent of a new administration that had policy changes around tariffs and taxes--

And just a ton happening--

--that were super meaningful--

--geopolitically.

And a ton going on geopolitical activity. And yet, over that 12 to 18-month period, we've seen incredibly stable performance. We've also seen some defaults in the broader markets, going back to a tricolor or brands that defaulted on their credits. And are we seeing pockets across that where you hear about them? Yes. That's been going on for the last 10 years. Companies ebb and flow.

And natural to any traditional credit cycle.

100%.

Sure.

And 100%. And we are long in the cycle. And I think everybody recognizes that. But I feel like sometimes the news kind of is throwing the baby out with the bathwater, because if you go look at the historical data, we're seeing good performance. And we feel really confident about it.

Again, manager selection is important. That origination that I mentioned, incredibly important. And then active portfolio management. We don't make an investment and then say, OK, please pay us back in five or six years. We're collecting monthly financial statements from the companies. We are collecting quarterly compliance certificates, making sure that they're meeting the KPIs and the covenants that we outlined for them.

And then we're constantly dialoguing them about things that they want to do to the business. Do they want to do an acquisition? Do they want to have those growths? So each time they do that, we get to re-underwrite the business, because we won't extend credit unless we understand exactly what's going on in the business up-to-date, and then look at the future projections of the business.

And so there is a little bit of a disconnect. We can talk about AI. I know it's on everyone's mind. But again, if we look back on a 20-year history of investing in this asset class on the Ares platform, we've been through six administration changes. We've been through health care reforms, and we're invested in health care. We've been through now an AI reform. We went through a whole tech and cloud revolution going back into '01, and then again five or seven years ago.

And so again, all of that 20 year of history for a manager becomes an input. And we don't say, oh, now we're going to focus on AI. We've been focused on AI and all of the geopolitical risks and all of what an administration is saying in every investment we've made for the past 20 years on the Ares platform. And we will continue to evolve how we think about businesses and the types of companies that we want to lend to on a go-forward basis.

You bet. And I think really where you started there, manager selection being key, is so important, because ultimately, right, private markets may not be a fit for every family and for every portfolio. But what I do think is meaningful is if you're stepping into this part of the market, being very thoughtful around, one, the manager's track record that you're working with, and then also their level of involvement, to your point around re-underwriting these companies on a monthly and quarterly cadence around their financials, is incredibly important, again, when you're giving up the illiquidity and stepping into what could be a step out on the risk spectrum. So it's super helpful.

Yeah. And we can change loans. So if the company's performance changes and they want to borrow more money to do something else, we can change the loan. We can put more guardrails in in order to protect our downside. And we can get it closer to where the market is trading now.

And again, for our perspective, that allows the income to keep coming in, but creates what we would consider a very stable NAV, or net asset value of the business. And so that's kind of our goal, is to create a nice income stream for the investors while creating low volatility in the underlying performance of the assets.

And it's interesting, too, the flexibility on the front end and along the way of being with a private lender actually lends itself to, no pun intended there, but to a slightly more durable, or opportunity for a more durable return stream over time for the end investor, which is pretty nice.

Yeah, we've had companies in our portfolio that we've lent to for 10 years, and a lot of them through two or three different owners, because they like that cadence of the business for sure.

So you actually said it first. I was wondering how long we could get into our session today without bringing up AI.

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Slide: Current assessment of AI risks & opportunities. While AI technology has existed for decades, significant advancements in recent years have disrupted the technology landscape. A table organizes artificial intelligence disruption into three levels titled High Disruption, Medium Disruption, and Low Disruption. High disruption includes Content Creation and Information Synthesis, defined as creating new content such as text, image, and audio, and surfacing insights from aggregated data such as social media monitoring and dashboards. Medium disruption includes Workflow Automation and Collaboration, defined as automating manual business processes and facilitating communication and coordination. Low disruption includes System of Record and Business Infrastructure, defined as centralizing critical operations data into a single source and managing underlying infrastructure needed to operate businesses. Example software categories appear under each section. Content Creation includes Digital customer service, Digital and Ad-Tech Sales Enablement, and Application Development. Information Synthesis includes Analytics and BI, Enterprise Reporting, AI/ML Location Intelligence, Global Trade Management, Supply Chain Planning, and IT Performance Analysis. Workflow Automation includes Customer Engagement Center, Digital Commerce, Multichannel marketing, Procurement and Sourcing, and IT Delivery Automation. Collaboration includes Email, Video Conference, Messaging, and Content Collaboration Tools. System of Record includes ERP, EHR, Customer Data Platform, and Warehouse Management. Business Infrastructure includes Endpoint Protection, SIEM, Backup and Recovery, Software Defined Storage, and Virtual Desktop.

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But it is top of mind for so many investors. On the public side, we've been talking about AI, obviously, also ad nauseam for the past couple of years, because that has historically been the only way to get access, the large-cap hyperscalers and leaders in the space. But a lot of clients who are already invested in private credit or looking to get invested are aware that enterprise software makes up a large tranche of private direct lending today.

Obviously, seeing AI disruption across that sector in public markets. Just high-level, would love to hear your thoughts on just AI disruption more broadly. And then we can move more specifically to direct lending, and really even maybe hit on how software ended up being 10%, 15%, 20% of the direct lending market today. It actually may be higher across lenders. But curious thoughts there.

Yeah, I want one article that talks about AI disruption and opportunity. I think that would be nice, because that's how we view it. And I think everybody gets it, but the media probably sells more papers about that disruption element of it. And so I think, like everybody else, whether that's JP Morgan or Ares Management, let alone middle market companies, are all saying, what are the risks and opportunities of AI?

And I would say most of our middle market companies right now are looking at the opportunities. How can I streamline my business? How can I become more efficient? How can I use AI to enhance my product, or the delivery and cost associated with that?

Does it pose risks? Of course. Is there some AI technology that will change the nature of my business or my ability to sell a service or a product? And everybody's working through that.

And also-- and sorry to cut in, but also not too dissimilar from 2000 to 2003 with the migration to internet, or 2014 to 2017 from migration onto the cloud.

Absolutely.

We've seen disruption across tech cycles over and over again. This is similar, albeit this seems like a greater magnitude. But--

Absolutely.

--very similar.

Yeah. And so everybody's kind of working through that. I think one thing we did realize is that it takes time.

Sure.

So it's not something that's going to happen overnight. And companies will be affected differently. As it relates specifically to enterprise software, our partners in the private equity world that have hired world-class talent to run and be CEOs of their businesses, most of them are really excited about the opportunity. They are saying, as it relates at least to enterprise or data management software, I have proprietary data, and now I can use AI as an enhancement to my product offering, and on a go-forward basis, use AI to be more effective in delivering a product to my client.

Will some of them go away? To be determined. Or will they evolve into something else? To be determined. It will take some time. It will not happen overnight. And we are working with our partners, both on the borrower side and on the private equity side, to assess that risk and do it.

We've been investing in software for 10 years. As a middle market lender, it has become part of that because of the growth opportunity and because of the efficiencies that the enterprise softwares were bringing to these businesses. And the data collection they knew was important, and now maybe this is the tool to really harness it. And so we're working with them in order to lay out a path for what happens next with those companies.

And like I said, the performance historically continues to be really strong. A lot of the companies continue to grow at 10% to 25%, and EBITDA and cash flow continues to grow. But we're not blind to the fact of what's going on with the AI revolution. And we'll continue to work with them and do that. We look at KPIs like the renewal rates and everything that's going on that, and we'll continue to do that on a go-forward basis.

And so we do know that it's a disruptor. We feel good about the companies that we've invested in. And then we're looking for the opportunity, both in those companies and then in our own lives and in our own companies on a go-forward basis.

You bet. And I think, too, just to re-underwrite a little bit of what you shared there, is I think the punch line being this is really a disruption cycle like any other in technology, and really being in the early innings. I think on the side of positivity and the benefits is this is early innings. And I think some companies will, in fact, be winners, and they will be the 2, the 5, the 10x of portfolios on the equity side.

But not every company will continue to have the right to exist. There will be losers. And I think what you're alluding to is strong underwriting, staying focused on the fundamentals, and the existing portfolios look intact today and will continue to be, but this isn't an overnight thing. This will be a cycle, if you will.

Yeah. I go back to 2001. And as I looked at all of the dotcom companies that were the high flyers being talked about in the press, I'm not sure I would have picked the book company to be the one that won.

Fair enough.

And maybe people were buying books and CDs there, but they're like, I'm never going to buy anything else there--

Really great point.

Because I want to touch it and do it. And so we all have to anchor ourselves there. There will be change. It's coming. But to look at all of the new companies, I'm not sure who's going to win or how it's going to get implemented. But it'll be interesting to see how it unfolds.

You bet. Well, I think the place that I would love to end is what is something that, one, you'd love for everyone to walk away with. We hit five ideas today, but I'm curious what your punch line would be.

Yeah, again, it's been a passion of mine and my partners at Ares as we've built this business, and really extremely excited and optimistic about the next growth period, the evolution of the asset class. It is getting more mature. I think manager selection and then managers that have built size and scale I think are going to become more entrenched and have competitive advantages that suit to that. And then ones that, again, build those relationships.

We didn't talk a ton about a situation where we've helped out, but we've been through the financial crisis. We went through COVID. And being a bilateral lender to a company allows us to do certain things, to work with our partners, to work with private equity firms and the borrowers in order to help them get through something, and then re-achieve growth through acquisition and things that the capital becomes valuable for. So I'm excited about where we are and excited about the future of the private credit industry.

Awesome. So more to come.

More to come.

Michael, thank you so much for your time. This was a learning opportunity for me. I hope everyone on the line got some insights that hopefully resonated. If you have any more questions, you are so welcome to reach out to your JP Morgan team. We'll be back next month for another episode of Alternative Access. But thank you all so much for spending your time with us. We really appreciate it.

Thank you for joining us. Prior to making financial or investment decisions, you should speak with a qualified professional in your JP Morgan team. This concludes today's webcast. You may now disconnect.

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