Inside the Rise of Private Credit with Joseph Glatt

This week’s episode of Industry Insights: Exclusive Interviews explores the transformation of private credit from a specialized corner of finance to a defining asset class of our era. Host Julie Miecamp and Chief Correspondent for Large Cap Private Credit Paola Aurisicchio sit down with Joseph Glatt, Partner and Co-Chair of the Global Private Credit Group at Paul Weiss, who brings over 25 years of experience and a unique long-cycle perspective on the market’s evolution.

---

The Post-Crisis Acceleration: How Private Credit Found Its Moment

The conversation begins with Joseph outlining how private credit accelerated after the great financial crisis through a combination of structural, regulatory, and behavioral shifts. As banks retrenched due to Basel capital requirements and risk-weighted asset constraints, institutional investors like insurance companies sought stable contractual yield in a low-rate environment. This created a vacuum that private credit was positioned to fill.

What private credit brought to the market:

• Speed – Faster execution than traditional bank lending
• Certainty – Reliable capital commitment without syndication risk
• Customization – Bespoke structures tailored to specific business needs

The asset class evolved from providing traditional leveraged buyout financing to encompassing a much broader universe of opportunities, driven by three key forces: institutionalization, asset-based financing expansion, and technological advancement.

Asset-Based Finance: The New Frontier

Joseph provides clarity on the distinction between asset-based finance and traditional cash flow lending. Asset-based finance ties repayment to identifiable, self-liquidating assets like receivables, leases, inventory, and royalties – essentially “something you can touch” versus cash flow lending which is secured by “what you can model.”

Why asset-based finance has gained momentum:

• Banks remain constrained in asset-heavy verticals like consumer finance and equipment leasing
• Technology enables real-time loan-level data and performance analytics
• Capital efficiency allows investors to earn yield backed by tangible collateral
• Floating rate components and shorter duration match insurer needs

High-growth sectors include:

• Data centers and digital infrastructure
• Healthcare receivables with diversified payer mixes
• Music, media, and sports royalties with predictable cash flows
• Energy transition assets and EV charging networks

Investment Grade Companies Embrace Private Markets

A significant shift has occurred in how investment-grade companies view private credit. What was once considered a “measure of last resort” is now seen as another tool in the corporate toolkit. CFOs, treasurers, and CEOs recognize that private markets can execute quickly, quietly, and at scale, particularly during volatile public market conditions.

The three pillars driving adoption:

1. Speed – Faster execution than public markets
2. Certainty – Bilateral solutions without syndication risk
3. Customization – Structures designed around business realities rather than standard formats

Joseph emphasizes that customization means “structuring around business realities instead of forcing them into a standard format.” This includes delayed draw tranches matched to phased capital expenditures, step-down pricing grids tied to leverage or performance, and covenant sets that align with actual operating rhythms.

Digital Infrastructure: Financing the AI Revolution

The explosive demand for digital infrastructure, driven by AI workloads, has created a new model where private credit partners with hyperscalers and infrastructure sponsors to fund multi-phase buildouts. These ecosystems combine long-term offtake contracts from tech tenants, construction expertise from infrastructure operators, and financing discipline from private credit investors.

Lenders finance comprehensive packages including site control, entitlements, power interconnection, and construction risk, all underwritten to contractual durability. The focus is on capacity delivery – measured in megawatts or uptime – and counterparty strength, with investment-grade hyperscalers providing the most attractive risk profiles.

Sports: From Passion Project to Institutional Asset Class

Sports investing has evolved from wealthy individuals’ passion projects into a media and intellectual property business. Leagues have professionalized governance, created clearer frameworks for institutional investment, and locked in long-term broadcast deals generating predictable cash flows.

Key financing structures focus on:

• League distributions and broadcast rights
• Sponsorship and licensing fees
• Contracted revenue streams rather than performance-based upside
• Cross-collateralization aligning stadium debt with team debt

Joseph highlights women’s sports and esports as particularly exciting developments, with women’s sports crossing commercial thresholds in audience engagement and sponsorships, while esports represents the next frontier tied to digital infrastructure.

Legal Evolution: Documentation for a New Era

Deal structures are becoming increasingly hybrid, combining elements of asset-based lending, term loans, and structured credit within single facilities. There’s greater emphasis on data rights and servicer oversight, with lenders requiring ongoing access to reporting, direct payment flows, and step-in rights.

Joseph notes an alignment with investment-grade standards, including rating agency-style covenant packages and prepayment economics that reward long-term partnerships. The future of documentation centers on “transparency plus flexibility” – agreements that protect lenders while allowing borrowers operational freedom.

Looking Ahead: The Next Five Years

Joseph predicts private credit will continue evolving as a core pillar of global finance rather than an alternative asset class. Three key trends will shape the future:

Globalization – Expansion beyond the U.S. into Europe, Asia, and the Middle East where demand for alternative capital is rising

Bank Partnerships – Increased collaboration through co-lending, risk sharing, and balance sheet optimization rather than zero-sum competition

Transparency and Professionalization – Better data, performance benchmarking, and regulatory engagement as indicators of market maturity

The winners will be platforms with scale, discipline, and multi-cycle credibility – those capable of deploying capital across markets without diluting underwriting standards.

Personal Insights: Building Institutions That Matter

In a personal segment, Joseph reflects on what drew him to law – not traditional courtroom advocacy, but the strategic use of law as an instrument for designing platforms and products through smart structuring. His proudest career moments involve helping build institutions that kept capital flowing during market stress, particularly during the great financial crisis.

His advice for young lawyers emphasizes understanding the business model behind transactions: “The best lawyers see both the legal and the commercial chessboard” and develop the ability to anticipate rather than just react.

Listen & Subscribe

Listen now on Apple Podcasts, Spotify, Amazon Music, or wherever you get your podcasts.

Produced and edited by two-time Emmy Award-winning producer Tanya Hubbard.