“We certainly have noted from an oil price or fuel price perspective, just how comfortable businesses have gotten with oil price or gas price pass-throughs,” says Aaron Kless, CEO and CIO of direct lending specialist Andalusian Credit Partners, on the latest edition of Credit Exchange with Lisa Lee.

“They’ve really been able to manage that price volatility, and price spikes, quite well.”

Andalusian has a unique perspective on the macro-economic backdrop. Its executive chairman is Roger W. Ferguson, Jr., a former vice-chairman of the Federal Reserve, who also sits on its investment committee.

“Our view certainly is that there’s really no expectation of rate cuts, [and the] possibility of rate increases,” says Kless.

The firm focuses on the so-called middle market segment, which drives around 40% of US GDP and 30% of US employment.

“We continue to see real resilience in the consumer, even at the lower part,” says Kless, who was formerly head of non-sponsor direct lending at Apollo Global Management.

Kless also discusses the attractiveness of sports investing due to the recurring, predictable and sticky nature of the cashflow. The World Cup will help boost soccer in the US.

“We’re on the precipice of something really exciting around soccer,” he says.

“We get to participate in the market, or at least in the deal flow in the market. [There are] lots of smart and interesting things happening around what I would call ‘minor league’ soccer.”

Kless also talks about what makes a good investment in sports. For instance, pickleball as an amateur sport is interesting, but remains too emergent from a professional perspective for a credit investment.