In this recent ION Influencers fireside chat, Gabriel Yomi Dabiri, Global Head of Private Credit and Direct Lending at Squire Patton Boggs, explored the evolving landscape of private credit markets. With over 16 years of legal experience spanning magic circle firms in London and Singapore to his current role in New York, Dabiri offers a unique front-row perspective on an asset class that has grown from a $150 billion cottage industry in 2008 to nearly $2 trillion today.

Key Topics Discussed

1. The Meteoric Rise of Private Credit

Dabiri traces his 13-year journey in private credit, noting how the market has transformed from obscurity to indispensability. What began as a niche alternative following the 2008 financial crisis has exploded into a sophisticated $2 trillion asset class, with remarkable segmentation and specialization emerging alongside its growth.

2. Market Structure: Behemoths vs. Specialists

The conversation reveals a striking bifurcation:

• Top 6-7 funds now control 70-80% of the market, driving deal terms and market dynamics

• Smaller players differentiate through specialization in sectors (healthcare, distressed), geography, or company life cycle stages

• Specialization, underwriting discipline, and geographic expertise serve as effective “moats” for firms of all sizes

3. Bank Partnerships: If You Can’t Beat Them, Join Them

Dabiri explores the evolving relationship between traditional banks and private credit providers:

• Banks bring extensive client relationships and regulatory stability

• Private credit offers flexibility where traditional lenders face regulatory constraints

• Hybrid syndications now feature both traditional and private credit lenders in multi-billion dollar facilities

• Early-stage formal tie-ups show promise, though it’s too soon to declare victory

4. Competitive Advantages Driving Private Credit

• Speed: Single-lender deals vs. syndicate negotiations

• Continuity: Buy-and-hold strategy means lenders stay through the entire loan life cycle

• Flexibility: Greater willingness to modify terms during external shocks (COVID, interest rate hikes)

• Creativity: Private loans allow for more tailored documentation than syndicated deals

5. Transparency and Recent Negative Press

Addressing industry criticism head-on:

• Investors are increasingly demanding transparency

• The buy-and-hold nature creates natural self-policing—bad loans stay on balance sheets

• Recent negative articles often “paint the entire market with the same brush”

• While bad actors exist in any system, the largest players demonstrate disciplined underwriting

• Key takeaway: “Buyer beware” applies equally to private credit and traditional lending

6. The Evolving Legal Skill Set

Then vs. Now:

• Past: Detail orientation in credit support documents was paramount

• Present: The best lawyers combine detail orientation, creativity, and relentless responsiveness

• Future: AI will commoditize repetitive tasks, but strategic advisory, negotiation skill, and judgment will remain invaluable

7. Technology’s Role in Private Credit

• AI will first automate commoditized tasks (data review, repetitive documentation)

• Higher-level thinking, negotiation, and strategic guidance remain human domains

• The lawyer of the future serves as a strategic adviser, not just a scribe

8. Hot Sub-Asset Classes and Future Trends

Currently Hot:

• NAV financings

• Asset-based lending (ABL)

Five-Year Outlook:

• Healthcare lending requires specialized expertise resistant to automation

• Secondaries activity expected to increase

• Geographic expansion beyond saturated U.S. markets

9. Democratization of Private Credit

• Early stages of moving into retail and 401(k) markets

• Warning: Must proceed thoughtfully—retirement savers differ from sophisticated institutional investors

• Reputation management crucial as the asset class broadens its investor base

10. Geographic Dynamics

• U.S. currently hottest but rapidly saturating (weakening deal terms signal intense competition)

• Larger players increasingly eyeing international markets earlier in their private credit growth trajectory

Key timestamps:

00:06 Introduction to the Fireside Chat
01:43 Evolution of the Private Credit Industry
02:30 Growth and Changes in Private Credit
05:05 Creating Competitive Advantages in Private Credit
06:27 Partnerships Between Private Credit and Traditional Banks
08:46 Differentiating Factors in Private Credit Deals
12:15 Transparency in the Private Credit Market
13:59 Addressing Negative Press in Private Credit
16:35 Characteristics of Successful Private Credit Lawyers
20:49 Future Trends in Private Credit
21:42 Democratization of Private Credit Assets
22:53 Market Dynamics and Geographic Trends
23:42 The Future of Legal Talent in Private Credit
24:32 Conclusion and Closing Remarks