Most of the current discussion around private credit risk is directionally right.
But it’s focused in the wrong place.
Capital is reacting to perceived risk in:
– software credit
– broadly defined “consumer” exposure
While overlooking a segment where:
– borrower quality is stronger
– demand is structurally anchored
– and the real constraint isn’t credit… it’s conversion
The result is not just inefficiency. It’s mispricing.
This note lays out:
• where that mispricing exists
• why it persists
• and how value is shifting away from balance sheets toward transaction infrastructure
Including one of the more underappreciated dynamics in the market today:
→ alpha being created not through underwriting… but through capturing transactions the system currently fails to close