Marks dates the origin of nonbank direct lending to 2011 when banks became unable to meet private equity demand.
“And so so called nonbank lenders stepped in to make the loans that the banks weren't making.”
Marks traces private credit's origins to 2011 when regulated banks withdrew from buyout lending and non-bank lenders filled the gap.
“in 2011, when the banks chastened and regulated because of the global financial crisis, pulled back from lending for buyouts, so called non bank lenders stepped in and started to engage in direct lending, lending for mid sized buyouts.”
Marks says high-quality assets can be risky if overpriced, citing nifty-fifty stocks that lost almost everything from 1969 to 1974.
“A high quality asset can be priced so high that it's risky. I started work at Citibank in September 1969, when I got out of Chicago Booth.”
Wharton School
“And if you bought those stocks, the day I got there in '69, and you held them firmly for five years, you lost almost all your money.”