In this ION Influencers Fireside Chat, Emily Bannister, Head of Private Credit at Wellington Management, discussed the evolution of private credit and its growing role in global capital markets. She highlighted how private credit has expanded beyond below-investment-grade corporate loans into real assets, investment-grade credit, and growth lending. Bannister outlined Wellington’s strategy of identifying funding gaps by leveraging research depth, cross-market insights, and top investment talent.

Key Topics Discussed

1. Emily Bannister’s Career and Wellington’s Role

• Bannister has over 20 years of experience in investment management, spanning public and private markets.

• Wellington manages over $1 trillion in assets, serving 2,000+ clients globally across equities, fixed income, private equity, and private credit.

2. Evolution of Credit Markets

• Historically, banks and public syndicated markets were primary funding sources.

• Post-2008 financial crisis, private credit stepped in to fill gaps, especially in below-investment-grade corporate credit.

• In the past five years, private credit expanded into real assets, higher-quality lending, and new market niches.

3. Wellington’s Private Credit Strategy

• Focused on leveraging research depth and cross-market insights.

• Built capabilities in:

  • Investment-grade private credit (higher quality).

  • Growth lending (pre-IPO tech and healthcare firms).

  • Commercial real estate debt (backed by real assets).

• Emphasis on identifying funding gaps and offering differentiated client outcomes.

4. Identifying Opportunities and Funding Gaps

• Wellington seeks the intersection of three factors:

  1. Unique Wellington research edge.

  2. Attractive and growing markets.

  3. Exceptional investment talent.

• Example: After Silicon Valley Bank’s collapse in 2023, Wellington accelerated its growth lending platform to address the funding void.

5. Talent and Research Depth

• Recruiting focuses on credit-tested experience and collaborative, research-driven teams.

• Case study: A global cocoa and coffee distributor deal leveraged Wellington’s commodity, country, and client insights to deliver strong due diligence.

6. The Four Pillars of Judgment in Private Credit

1. Origination & access to deals.

2. Credit underwriting.

3. Structuring (covenants, risk planning).

4. Portfolio management aligned with client needs.

7. Risks and Growth Outlook for Private Credit

• Risks vary by sector—some areas face rising challenges, while others present strong opportunities.

• Private credit will continue to grow, though not at the explosive pace of private equity, due to its self-liquidating nature.

• Growth is strongest in real assets, higher-quality credit, and innovation-driven lending.

8. Platform vs. Specialist Approaches

• The market is moving toward platform-based models with multiple strategies, but specialists will remain in niche areas.

• Platforms like Wellington’s allow serving diverse global clients with different risk-return profiles.

9. Looking Ahead

• Bannister sees Wellington’s future in leveraging unique research insights and adapting to evolving client needs.

• Flexibility and innovation will be key as private credit continues to expand across asset classes.

Key timestamps:

00:07 Introduction to the Fireside Chats
01:16 Overview of Wellington’s Operations
01:47 Milestones in Private Capital Evolution
03:39 Wellington’s Mission and Evolution in Private Credit
05:20 Introduction of Private Real Estate Debt Capability
06:29 Identifying and Assessing Funding Gaps
08:32 Understanding Client Needs
10:32 Talent Acquisition in Private Credit
12:17 Case Study: Global Cocoa Manufacturer Deal
13:42 The Importance of Judgment in Private Credit
16:50 Future Capabilities and Market Adaptation
20:07 The Role of Platforms in Private Credit
21:18 Building a Versatile Investment Platform
22:29 Growth Projections for Private Credit
23:32 Future Roles in Private Credit