Lotfi Karoui

"On the public side the opportunity set is attractive. You being paid 5%-6%, that is a pretty good value proposition... the value of having a continuous price discovery." As retail and institutional investors get trapped in illiquid private credit funds (due to redemption gates), there will be a premium placed on liquidity. Public high-yield bonds offer comparable, attractive yields (5-6%) but with daily liquidity and transparent pricing, drawing capital away from private markets. LONG. Public liquid credit is mispriced relative to the illiquidity and default risks currently building in the private credit shadow banking sector. A severe macroeconomic recession causes a spike in corporate defaults, widening high-yield spreads and causing principal losses.