Podcast: Inside Sixth Street’s Approach to European Direct Lending

[00:00:03] Patrick Schoennagel “Hey, don’t shop this around. We’re good for the whole thing. We can step in and do 1.6 billion in a single deal.” That same firm, couple weeks later, came back to us, tail between the legs, and said, “We’re now at 150 million, so 10%.” And the only thing that had changed is that because they were a U.S.-based lender, they’d had redemptions, and all of a sudden, for the first time, instead of thinking, “How can we win more deals? How can we deploy assets in the deals that we like?” They also have to worry about their own liquidity and how they’re set up. And that’s something that in Europe is just really rare. Welcome to Capital Revolution, the podcast that brings you to the table for conversations you won’t hear anywhere else in alternative capital. My name is Patrick Schoennagel, Managing Director at Houlihan Lokey, and I’ll be today’s host for this episode. I’m excited that today I’m joined by Mike Griffin, Partner at Sixth Street and Co-Head of the firm’s global direct lending business. Mike also leads the European Direct Lending Platform. He has built one of the most respected private credit franchises on the continent, growing Sixth Street’s European presence from a standing start to more than 7 billion of investable capital with the recent close of SLE III. He was also named one of Private Equity News’ 20 most influential in private credit for 2025, which is a reflection of both his personal track record and the platform he’s built. Today, we’re going to cover a lot of ground, how private credit in Europe got to where it is, what Mike makes of the current market environment: How Sixth Street is thinking about the software sector in an age of AI disruption, and where we both see the asset class heading. Let’s get into it. Welcome again, Mike.

[00:01:54] Mike Griffin Thanks, Patrick. Really great to be here. Thanks for the invite.

[00:01:58] Patrick Schoennagel What I’d love to ask you, Mike, is, what was the market like when you first arrived in private credit?

[00:02:03] Mike Griffin It was a really interesting period of time, right? Our firm, Sixth Street, has always been investing in Europe since our start in 2009. Many of our early transactions were actually European financing. So, if you take our direct lending franchise in the U.S., our first investment in 2011 out of our dedicated first direct lending vehicle was a European financing, so it’s a market we’ve always been in. But what we had never seen was these large structural shifts in the way that regulation and bank lending meant there were capital constraints that came into the market that presented opportunities for other third-party capital providers to kind of fill that void. And so, when I moved over in 2012, I always say it was kind of part of that first wave of the deleveraging cycle within banks. And we really saw it kind of two ways, right? We were coming out of the GFC, you had the European sovereign debt crisis, you had the implementation of Basel hitting bank balance sheets, and that just meant there was a constraint on capital within banks. And so, we saw two things kind of happening. In the first instance, I always called the first period of bank deleveraging, kind of, version one, which was disposition of portfolios. So, we had set up. We were looking at portfolio sales in the U.K. and Ireland of corporate loans, in Southern Europe, went in solar assets, and so we became a large buyer of those assets. Off the back of that, we saw balance sheet for new deals get meaningfully constrained. So,

[00:03:36] Patrick Schoennagel I made for the banks, basically.

[00:03:39] Mike Griffin Exactly. If you think about that mid-market lending universe in the U.K., which is really where direct lending kind of started, regularly when we first came you would see bank club deals at a couple hundred million sterling of issuance, then that shrunk to, each bank could do 25 million, you needed four to get a 100 million transaction done, and that just eliminated certainty. There was solving towards smaller positions, different credit boxes, which created this void for other parties of capital to step in and provide certainty and scalable financing to European issuers.

[00:04:13] Patrick Schoennagel Yeah, and I mean, when I came in 2015, which is two years after you, private credit already existed obviously in Europe, and deals were getting done. There had been some lenders who had been active in Europe even before Sixth Street, but when we compare that to now, both the number of players and the amount of capital those players have raised, it’s just incredible what’s happened in just a little over a decade. And you can see that evolution also in who uses private credit and how those deals are done. And one thing that we can talk about, both on deals that we’ve done together and deals we've done separately, is that the market’s just matured a lot. What are your thoughts on, how would you compare getting a deal done 10 years ago compared to now, and how do you see the competitive landscape?

[00:05:09] Mike Griffin Yeah, I mean, look, there’s been a lot of evolutions in the way the private credit industry has evolved. I’d say, back to day one from when we set up Sixth Street, our ethos was flexibility of capital, have dedicated themes, migrate through different themes at different moments in time, and have a really broad architecture in terms of people and our capital so that we could address any opportunity set anywhere in the capital structure anywhere in the world. And so, with that design, that growth and that change in the market ecosystem has been, I think, really great for us to scale our business. So, if you rewind to 2012, 2014 kind of era, a lot of the transactions getting done, you would designate as really mid-cap issuance. There was a larger-cap public market financing that would get done for large-cap private equity, and direct lending really filled that void of commercial bank lending. Our viewpoint was, you needed to set up capabilities to provide capital for companies at any point in their growth cycle. And that meant not just sponsor finance, where I would say the direct lending market was kind of born in Europe, was bank lending to leverage finance or leverage buyouts, was really the core plumbing of where things built, and that was done largely between investment teams and private credit firms, investment teams in private equity firms with a traditional debt advisor helping facilitate those conversations. Now fast forward to today, the lines between what is a credit investment, what is an equity investment, all kind of blurred and it’s just capital, right? And you should express a view on this, given you were one of the first firms that I would say kind of saw that as well, and formed a capital solutions team where you brought everything under an umbrella.

[00:06:59] Patrick Schoennagel You’re completely right. I mean, as recently as a little over a decade ago, most of the capital being deployed in Europe was either traditional PE, majority buyouts, or traditional senior debt, unitranche, acquisition, financings, refinancings. And that's what people thought when they heard the word “private credit,” was PE partnering with a private credit lender to do a deal. I think now, from that senior debt component that replaced commercial banks to the majority traditional PE buyout, majority buyout, everything in the middle now is filled by either multi-strategy asset managers or pure play firms that focus on one part of that. So, to your point, we obviously evolved also and had started with just traditional debt advisory, helping people raise primarily senior debt, a little bit of junior debt, but really all traditional debt, to now where we’re doing everything from continuation vehicles to hybrid capital, pref equity, fundraising for firms. And it’s just, the market’s just grown, and we’ve grown with that market.

[00:08:15] Mike Griffin Given our heritage at Sixth Street, we’ve been in the private credit markets globally for a really long time. And our viewpoint has always been certainty, flexibility, and approaching things with a blank white sheet of paper to just be a solutions provider. And that can be for writing a 50 million check to facilitate ownership change between generations. That can be a billion financing to do a corporate carve out. That could be in the instance of, in 2016, we provided a convertible note to Spotify at a point where people didn’t talk about structured capital into Europe. And if I think about one of the first transactions we did together, now, probably seven years ago, you know, that was an investment that had a combination of a senior loan combined with back leverage against a minority equity stake in a company that, it was being acquired out of a large strategic and it had lots of complicated pieces to it. And if you think about that, at that time, there were not many financing structures that look like that. And if you think about the way the alternatives environment has evolved, people generally talk about products, they talk about silos, pools of capital, which ultimately sets you up to have a very monoline set of things that you can do within a strategy. At Sixth Street, and this is why we were able to do those financings like we talked about from day one, was our whole platform was built to be one team, fully integrated, just set people up to have sourcing channels and build ecosystems, but then have very dedicated sector capabilities that allow you to be local in a different way than just we have a team covering a certain market that was culturally or with the same language capabilities connected. I think that was one of the biggest learnings I think I’ve probably had from moving here from the U.S. is that, in Europe, you kind of have this third rail of like, how are you local? And when we’ve thought about like how to put that like Rubik’s Cube together, our big takeaway was like, local baseload number one is like the language and capability skills. But like, our view has always been like, we could be like, we can do something different than just that, and coupling that with being local in a different way through very dedicated sector capabilities, be it in infrastructure, be it in healthcare, be it in technology, be it in asset-based finance. If you can pull local relationships together with local relationships through sector and geography, you can kind of create different conversations that lead to, not just a, “I’m looking for a senior loan.” That’s the first conversation. We’re going to ask like 10 more and try to understand what somebody really needs. And so, if you can kind of create that mutual connection point between sector local and geographic local, that’s where we feel like there’s some differentiate.

[00:11:14] Patrick Schoennagel Let’s shift gears a little bit and talk about the current market. You and I have been in this market through COVID crisis, energy crisis, cost of living crisis, but probably never in our joint time in the European market has private credit itself been more of a topic in the news. Obviously, earlier this year, you had the redemption topic for many credit managers. In part driven by the fact that the software sector was expected to go and is going through major disruption from AI. Let’s really get into that for a minute and, what are you really seeing in your seat within one of those credit managers, and how are you thinking about how it’s been covered? Is it overblown? Is it appropriate for some but not all? Let’s let our listeners understand a little bit more detail of why I, for one, and I think you agree, are not worried about the European private credit market because it’s just fundamentally different from the U.S. one.

[00:12:25] Mike Griffin Yeah, sure. So, I think, look there’s a lot to unpack within that question. It’s a big question, and so we should play a bit of tennis and work through that. But like, if you think about kind of the first part or the first aspect of that, it’s the funding or the capital that comes into the market. And you highlighted the redemption challenges that some of the U.S. nontraded BDCs have gone through over the last 12 months. In Europe, as you kind of alluded to, the plumbing of the market is quite different. Most of the capital that exists within the European private capital markets are private drawdown fund structures, term commitments, long-term in nature, committed capital that don’t present these opportunities for potential asset liability mismatches holistically.

[00:13:14] Patrick Schoennagel Which I think is a huge point. And I understand why it is a topic because one of the first things you and I will have learned in our credit training was that mismatch, or rather, avoiding that mismatch of your assets and your liabilities.

[00:13:31] Mike Griffin Yep, I totally agree. And most credit cycles that we’ve seen have been catalyzed by asset liability mismatches. And so, at Sixth Street, we’ve been very intentional about the type of capital we’ve raised and the type of capital that we’ve raised within each opportunity set that we have dedicated pools of capital for so that we’re never in that situation of being manufacturing assets because you’ve got to deploy. It’s very much an investor-first business model focused on deep underwriting standards, credit quality, roll up your sleeves and do the heavy lift due diligence, and partner with that sector experience so that you have very deep knowledge of the underlying business, cash flow characteristics, and asset characteristics, right?

[00:14:18] Patrick Schoennagel To be honest, the only deals that I’ve seen impacted are really the very large deals, the billion-plus deals. And we had one instance, just to give our listeners a sort of idea of what was going on. So earlier this year when all this stuff was going on, we had a deal that was about 1.5, 1.6 billion. And we had one of your competitors who was pounding on our door saying, “Hey, don’t shop this around. We’re good for the whole thing. We can step in and do 1.6 billion in a single deal.” That same firm, couple weeks later, came back to us, you know, sort of tail between the legs and said, “We’re now at 150 million.” So 10%. And the only thing that changed is that because they were a U.S.-based lender, they’d had redemptions, and all of a sudden, for the first time, instead of thinking, “How can we win more deals? How can we deploy assets in the deals that we like?” They also have to worry about their own liquidity and how they’re set up. And that’s something that in Europe is just really rare. And so, the European market being so large and so much capital having been raised on a long-term basis, dedicated funds, just means that borrowers now can benefit from very reliable partners who can lend them the money upfront and then probably deploy more if more capital is needed. I just think it’s a completely different market and probably not fully appreciated if you just read the news.

[00:15:50] Mike Griffin I can only really speak to the capital we manage and the way we think about delivering for our core relationships in the market: you, the issuers that we partner with. And the bellwether for us has always been reliability, certainty, and flexibility, right? And so, we’ve always positioned the firm to be able to make really large investment sizes, right? So, we’re regularly writing one-billion, one-and-a-half-billion-dollar commitments or Euro commitments.

[00:16:22] Patrick Schoennagel And that’s a change from when we first met, right? That ability to write a check of that size. And basically, when you can write a check of that size, you can be a solution for a client either who’s larger or for longer, depending on when you start your investment relationship. So even that, I think, is a very good bellwether of how the European market has evolved and grown up, because there’s many parties now who can do way more than they used to be able to. Couple of examples that haven’t had that same fundraising success, and we can talk about that separately, but I think it just means that European borrowers, shareholders, owners, founders, private equity firms, they haven’t really lost any ground in terms of being able to get financing for deals that makes sense. Now, I say that because obviously there has been, I would say, sector appetite changes. A couple years ago, you would trip over lenders for any software and sort of tech-enabled recurring revenue deal, and they would do by far the most aggressive terms and structures for those borrowers. That was sort of the most loved sector. And I know you’ve been investing in the tech and software sector for a long time. How do you see that sector now, and have lenders maybe done a little too much in terms of leverage and so on over the years at the height of that market, and is that coming back to haunt them?

[00:18:02] Mike Griffin Yeah, look, I think, again, not all software investments or software companies are the same. Too much capital flows into an opportunity set, and there’s too much excitement, terms tighten, terms get more flexible, and then there’s a correction. And I think we’re going through that moment within software, and I think we’ve gone through that moment more holistically in credit markets. So if you just take broadly the market as a whole, we’ve seen a very significant kind of change post the inflation and rate widening cycle that we’ve seen, right? And so, if you think about companies and capital structures, there were a lot of capital structures put in place in 2020 through 2022 that were at higher leverage where there was less durable cash flow, more cyclicality in the underlying markets, and we’re going through a moment where those companies need some form of capital to help facilitate change or longer hold periods or something. That presents an opportunity. So, let’s pick up on the AI and software theme within that. Let’s pick up within the solutions provider to facilitate change as well. If you think about the AI and software point, to your point earlier, not all software is created equal. And there’s been a lot of excess hype and probably excess fear in today’s market discourse, for sure. And our belief is that the current AI fear in the market was really an equity valuation problem. So, when you think about growth rates, there’s a view that growth is rebased. And that affects valuation multiples and affects equity transactions.

[00:19:51] Patrick Schoennagel What worries me a little bit, and it’s not necessarily a private credit point, it’s more of a macro point and a psychology point, is, we’re both getting a little bit older towards the middle of our career, end of career, depending on what your plans are. But there are many people active in the market, at our clients, at the PE firms that own the companies, at competitors of ours, who haven’t really experienced a proper correction, right? The, you mentioned the dot-com era, I don’t know what it was, but 70%, I think, reduction in NASDAQ, obviously 2008, 2009, very dire days and huge repricings of assets. Do you think the market is ready if that kind of correction is coming?

[00:20:43] Mike Griffin Yeah, look, so here’s what I would say is moments of dislocation and volatility have always been among our most active investment periods. And I can’t necessarily speak to other people and their preparedness and the viewpoints, but I share the sentiment that, you know, a lot of people, it’s been a long time since we’ve been through a real credit cycle.

[00:21:05] Patrick Schoennagel And the same on the lender side in terms of not being used to having a case where they might be in a position where they could not only end up owning the business, but losing a lot of their capital, which, as you know, in private credit, the model isn’t really set up from a returns perspective to absorb a lot of those events, right? Because your upside is capped basically and your downside is not, so you have a couple of zeros, you’re in real trouble, so that’s why I think if something like that were to happen, yes, it’s going to be a huge opportunity for firms like yours who’ve been there, done that, will see opportunity in that. But I think overall, it does worry me whether, if there’s a huge public market correction that spills over into the private markets that people necessarily have been set up to handle that.

[00:21:59] Mike Griffin Our viewpoint is you need to have the capabilities, the capital, and be set up to be able to play offense in moments of dislocation. That’s always been the focus for the firm. And that’s why we’ve talked so much about culture in this conversation, and I’ve referenced back to that so many times, because no silos, constant communication, and teams working together to seize those moments to be a solutions provider at scale. To issuers, boards, private equity sponsors, your clients. That’s what the capabilities need to be set up to do. And I think we’re also going through a moment where we need to invest in technology and invest in being best-in-class at utilizing the resources around us, right?

[00:22:49] Patrick Schoennagel We’ve talked about what’s going on now. We’ve already dabbled a little bit in what we think would happen if there were a major correction. That is not necessarily going to happen. So, if it doesn’t, where do you see this European private credit market in five or 10 years?

[00:23:05] Mike Griffin Yeah, I think it’s such an interesting period of time to be investing here. And we talk about this a lot when we catch up either socially or talking about a transaction. But, it still feels like, I probably shouldn’t use this in a conversation about Europe, but like, we’re early innings, and like that evolution of private markets in Europe because you’ve got, again, it’s fragmented, right? It's not one place, not one market at all. You’ve got different languages, different legal regimes, and different amounts of bank lending activity in different markets. And what’s super exciting is that we’ve got the opportunity to focus on all these different places at different points in time, which creates the opportunity if you’re nimble, if you are flexible, if you shift the prism. You can identify different things happening in different markets and try to fill that void. That’s the kind of style of investing we love to do. So, I would expect we will see a lot more adoption of private capital and private credit into family-owned companies, going through more generational changes because Europe is full of amazing companies that pass through the fifth generation of family. We’ve looked at so many of those opportunities the last 12 months. Five, 10 years ago, we had to educate a lot of those boards and issuers about what was direct lending.

[00:24:30] Patrick Schoennagel Who are you, and what is this product? And, there is still, in some cases, because we consider advising shareholders, there is still a lack of knowledge and understanding of what private credit is and isn’t. There’s often the fear of, wait, we’re a small Northern Italian business or German family-owned business. Who are these, either U.S. or international firms, that aren’t the local bank where I've known the bank manager since I was 25, right?

[00:25:06] Mike Griffin I think you’re right. There will be more acceptance of private credit as a regular-way product that’s not to be afraid of. Because those boards of those companies and great management teams, like, you need to connect in multiple ways, and then you need to be able to listen to what they need, and you need to have a white sheet of paper to just come up with the right financing. That might be a combination of debt and equity. It might be a convertible note. It might be a senior loan. But if you’ve got the capabilities and the capital with the people and the sector expertise, that’s where I think, like, the longer-term wins come in the market as it continues to grow and evolve. For sure, the sponsor finance transactions within direct lending are going to continue to grow, hold sizes will grow. That’s like one aspect or the base load of the market. And that’s where I think we’ve seen the last 10 to 15 years, where we’ve both been in this market, massive growth. I think it’s the other parts, and, like, the middle of the capital structure solutions. That’s where I think a lot is going to come from and, to our conversation earlier, I think a lot of the capital structures put in place between 20 and 22 and a different rate in inflationary environment, that’s going to create a huge opportunity for private credit. I’m super excited about what’s to come in Europe.

[00:26:17] Patrick Schoennagel And listen, the other thing to keep in mind, which is often not clear to some of our colleagues who work in North America, is the European private credit market, especially the middle market, it’s a relationship business. It’s not as transactional as the U.S. is. You have to have people that can connect with the board members, with the CEO, with the founder, as humans as well. It’s not just about what kind of check can you write, but do I want to partner with you?

[00:26:51] Mike Griffin Yeah, I think it’s clarity, creativity, and certainty. If you do those things right with the right people that have a broad aperture and flexible capabilities, I mean that’s been our view on the formula we’ve tried to kind of create and go with in Europe.

[00:27:09] Patrick Schoennagel I also think, because of what we talked about with private credit being in the news and redemptions, there will be winners and losers, like there are in every industry. And one thing that we as advisors will only really get paid for, giving good, honest, insightful advice to our clients. One thing that we’re going to be much more focused on than we’ve had to be in the past is also advising on how is this potential? Okay, we have a term sheet from this party and it’s a really good term sheet, but what about behind the scenes? How are they funded? How reliable are they going to be? Are they going to be successful in raising the next fund if you want to do something with them five years from now? All those sorts of things are starting to come into play and, to be honest, haven’t been previously because everyone was growing. But once fundraising got more difficult, and we should touch on that in a second as well, I think that’s going to be crucial for people to keep in mind before they sign an agreement or shake hands with an investor. They really need to understand how that investor is positioned for the long term.

[00:28:21] Mike Griffin Yeah, I completely agree. It’s all about high standards of underwriting, doing what you say you will do, but being disciplined. And I think, honestly, it’s like, you should never be afraid to say no to something. Our view is, like, that’s what creates long-term relationships with people is honesty, clarity, and doing what you’ll say you’ll do. And sometimes that means, this isn’t the right situation for me.

[00:28:47] Patrick Schoennagel And the listener should know that you say no to me way more than you say yes.

[00:28:49] Mike Griffin That is the art of the business. I think, what is it? Like, every private credit fund probably converts 1% to 3% of the deals they do a year, but we look at a lot. And, but you’re right. There’s a joke in that, but the reality is we do a lot of business together, and you rely on the value of the type of feedback we give you. That informs your judgment calls. And the better we are at that, the increased probability we’re going to do more and more together, right?

[00:29:16] Patrick Schoennagel I mentioned fundraising. One thing our listeners need to understand is that a lender’s appetite obviously is impacted by its leadership’s strategy, desires, background, pattern recognition, but it’s also driven by what the ultimate investors are giving as feedback when that lender is trying to raise its fund. One thing I’ve observed is that what lenders are willing, able, wanting to do has changed many times in Europe, right? We talked about software being everyone’s favorite for a while. Now that’s out of favor. We’ve seen the same with, sort of, consumer pre-COVID, and then COVID hit. I’m now seeing it with defense, which, in Europe now, has gone from basically being seen as an ESG negative to an ESG positive. How important is the fundraising process for Sixth Street in terms of informing what you’re willing and able to do?

[00:30:19] Mike Griffin Yeah. So, let me handle that a couple different ways, right? Our North Star is, if we are performing well for our capital partners, that’s what creates an infinite shelf life for our business. So, it’s all about investment returns and applying good judgment to what we do. So, like, in terms of, like, evolution of what we invest in, like, our base load to how we do that, I can’t speak to the market, but I can speak to, like, our, like, our strategy is like,

[00:30:51] Patrick Schoennagel But you can speak to what you’re observing.

[00:30:55] Mike Griffin Of course, I can speak to I observe, right? But like, yes, I observed, there’s flighty parts of capital in different parts of the market based on sentiment in the market. Is that capital-provider-driven? Is that market-sentiment-driven? I don’t know. I don’t sit in those organizations’ rooms, right? But, like, yes, there is flighty capital, but that for us, like, that always presents an opportunity, right? And so, from our perspective, we’re theme first, sector first, and flexibility first, right? And so, we’re going to rotate, and the best windows to invest are where we see there’s a capital demand and a lack of supply of capital into that market. We’re going to pivot, because that’s a moment where you can create differentiated outcomes, I think in terms of return and risk return skew. But the minute that the market starts to flood in, maybe you calibrate a little bit differently, or you find another open window in a different theme or a different sector. And that, like, rotation and migration is exactly why we set up our firm with the capabilities we have. And that has, to date, has been the strategy that has worked really well for us, and when you think about capital formation and long-term strategy, our view is it’s investor-first, and returns, role, and track record and performance will be how we’re measured at the end of the day.

[00:32:16] Patrick Schoennagel So, what we do is important and you’ve prioritized that over basically scale at all costs.

[00:32:21] Mike Griffin Yeah, so I mean, if you look at our third series of our direct lending pool of capital, I think it’s still sized very appropriately to the opportunity set. And there’s a reason, like I said earlier, we’re designed so that we can make a 50 million investment on one hand and north of a billion on the other hand, because the architecture of the way Sixth Street is capitalized holistically powers our European business to be really large as and when those opportunities to be large are valuable to our relationships.

[00:32:51] Patrick Schoennagel Makes sense. Last question before we do our famous rapid fire set of questions. Other than the Tottenham Hotspur, what keeps you up at night right now?

[00:33:01] Mike Griffin I believe very firmly, like, we can’t overly focus on things we don’t control. So, things like competition, markets, like, we don’t have control over those things, like, yes there will be change, yes we have to pivot, but the things we can control are the things I really try to focus my time on. So, it’s are we providing the right growth opportunities for our team? The right people in the right markets. Have we found those new opportunities or new windows in different parts of the market to invest in? Those are the things I really try to focus my time on.

[00:33:31] Patrick Schoennagel Yeah, makes sense. Okay, rapid fire. You ready?

[00:33:36] Mike Griffin Let’s do it.

[00:33:37] Patrick Schoennagel The book currently on your bedside table.

[00:33:39] Mike Griffin Yeah, it’s a book called Legacy. It’s about the All Blacks rugby team.

[00:33:44] Patrick Schoennagel Good, bad?

[00:33:45] Mike Griffin It’s amazing. I think everybody should pick it up. Like, the core of it is in the, like, I think it was the mid-2000s, despite having, like, one of the best teams in terms of, like, if you looked at a player roster, best team you could find.

[00:33:59] Patrick Schoennagel Yeah. What was your first job ever?

[00:34:01] Mike Griffin I was a caddy at Medina Country Club in Itasca, Illinois.

[00:34:06] Patrick Schoennagel Any lessons for life?

[00:34:07] Mike Griffin I learned about relationship building. You would build relationships with different members and their guests, and they would come back. They’d ask for you to be their caddy again. And that investment in people and relationships, that stuff goes away.

[00:34:18] Patrick Schoennagel Got it. What’s a private credit buzzword you’d like to get rid of?

[00:34:23] Mike Griffin There’s a bunch of these. I think the one

[00:34:27] Patrick Schoennagel Don’t say Megatron.

[00:34:30] Mike Griffin The one is products. When you think about things as products, it takes away the flexibility, the creativity, and, like, everything we believe in is, like, flexibility, creativity, and thought.

[00:34:38] Patrick Schoennagel Solutions, like Capital Solutions Group. And last question. What’s the best career advice you’ve ever gotten and from whom?

[00:34:48] Mike Griffin There’s so many different things that I draw upon, and I think the biggest thing I try to do is be a really active listener. Try to actually do self-reflection. And this comes from our CEO Alan Waxman. Just a constant pursuit of excellence and self-development. You can only unlock more potential if you sit back, take feedback as an opportunity, and apply to learn. Every day, I try to think through, like, what are the things I would have done differently today? What are things people talked to me about today that I can implement going forward?

[00:35:33] Patrick Schoennagel And you got that from Wax? All right. Well, Mike, thank you very much. That brings us to the end. If there’s one thing I hope listeners take away from today’s conversation, it’s that the noise around private credit right now is understandable, but the issues being highlighted are not evenly distributed. What’s happening with redemptions and liquidity mismatches is very much a U.S. phenomenon tied to retail-facing structures. And frankly, it’s just a different market over here in Europe. European private credit is almost entirely built on long-dated, committed capital. That structural difference means we haven’t seen the same pullback and appetite that some of our U.S. colleagues and clients have had to deal with this year. The second thing is on software and AI. Frankly, I don’t think this is really only an AI story. I think it’s more of a basic credit story as well. High leverage was applied at a certain point in the cycle against the specific growth assumption. And now, those assumptions unfortunately must be revisited. That’s not new or unique; that happens every cycle in a variety of different industries. Thank you for listening to Capital Revolution. For more insights, please visit our website at HL.com. And if you enjoyed today’s episode, please consider leaving us a rating or review on your podcast platform of choice.