Sixth Street Co-Cio See 'Sub-Fulfillment' in Private Debt

(Bloomberg) -Josh Easterly, co-head of sixth street partners, has warned to shift the fundamentals within credit markets, the risk of overlooking many investors and money managers. “Private credit markets are relatively complacent,” Easterly said in a television interview in Bloomberg on Tuesday, which attributes the problem to a mismatch between capital that dumps in the sector and valuable opportunities to deploy it. “Distributions don’t move as much as they should,” he said. Investors who generally overflow in private debt and credit underestimate the impact of both interest rate and credit distribution risk, according to Easterly, who is also co-president of the firm’s direct lending platform, Sixth Street Speciality Lending Inc. Plus, “We are in an environment of lower growth, which is bad for all investors,” he said. “Credit is really difficult at the moment.” Value in the complexity Easterly also said on Tuesday that sixth street gives the opportunity to provide financing for rescue debt to tense businesses as growth delays and the rates remain longer, but it must be a little ‘complex’ to be worth it. “In regular sponsoring funding, we do not see value there at the moment,” he said. “There’s a wonderful opportunity on the more complicated side.” Easterly previously emphasized how Sixth Street’s direct lending fund finds opportunities to structure measuring financing directly to companies. On a May 1 call that discussed earnings in the first quarter for the direct lending platform, he said that 84% of his new funding arose during that period outside the bail channel. He quoted the biggest investment in the first quarter, made to Bourque Logistics, as one example. Last month, the CO-CIO said in a letter to stakeholders that Sixth Street Partners expected a world of lower growth and return on capital, given higher rates, increased volatility and increased risk premiums. “In the long bow of the economy, we consider the current upheaval to global trade as more significant than the Covid stimulus and even the global financial crisis,” he wrote and described that volatility was possibly ‘the most important event’ to influence the economy in the long run. (Updates to correct the name of the company in the 10th paragraph.) More stories like these are available on Bloomberg.com © 2025 Bloomberg MP