Charlesbank’s head of credit explains how to trade private credit loans

“We’re in the trenches and the front lines of doing this,” says Sandor Hau, head of credit and managing partner at private equity firm Charlesbank Capital Partners, on the latest episode of Credit Exchange with Lisa Lee. Hau says he has been buying illiquid private credit loans for decades.

The buying and selling of private loans is still a niche and idiosyncratic play. But trading is accelerating as the private credit market expands in size and its liquidity needs grow. Private equity firms have the option to put certain firms into what are known as “disqualified lists”, and those lists are increasing. But that hasn’t materially impacted how Charlesbank buy and sells loans versus a year ago, or even half a decade ago.

Hau also speaks about his expectations for more private credit bankruptcies, artificial intelligence in private markets, and current LP mood.

Charlesbank was spun out of the Harvard University endowment nearly 30 years ago.