Lotfi Karoui on Private Credit and the AI CapEx Supercycle

From the pages of The Credit Market Lens to the Accrued Interest microphone, Lotfi Karoui joins host Greg Hall to explore why the focus on direct lending may be overshadowing the structural themes important to the future of credit markets. Together, they discuss the cyclical pressures weighing on business development companies and why liquidity alone may not resolve today’s challenges. Looking ahead, they explain why the AI CapEx super cycle, global energy reshoring, and renewed defense spending may test the market’s ability to absorb issuance. For advisors, these dynamics highlight the potential value of diversification in bonds and emerging markets. Show notes: (2:24) The State of Direct Lending (9:24) Will Transparency or Liquidity Help (20:49) The Default Cycle in Credit has Begun (25:05) Return of the Financial Engineers (28:53) Financing the AI Super Cycle (40:33) What’s Compelling in Credit Markets (44:21) Revisiting the 60/40 Portfolio If you want to go deeper, check out a few of Lotfi’s articles mentioned in the episode:

• The Credit Market Lens: Sharpe Is Back in Emerging Markets • Daily Pricing Is Not Daily Liquidity

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