So how justified do you think this really is, Scott? You seem to think it's somewhat contained, but could it spread?

Yeah, so I think if we take a step back, the challenges that the market has faced over the course of the last year plus really started out as much more of a liquidity driven challenge.

And the reality is the vast majority of funds, if not all of these funds, were structured to contemplate higher redemption periods and are doing exactly as they put forth, if you will.

But what's changed more recently, and it's really not just over the last several months, but over the last several quarters, if you will, as AI has become much more transformative and impactful, we're starting to not only see the rhetoric around the implications from this AI acceleration, but also some of the direct impacts on corporate performance, if you will, in different sectors.

There's obviously a lot of conversation and talk just broadly around software companies, and it's an incredibly broad brush to paint.

There's going to be really strong survivor bias on the software side.

There's also going to be companies that fall out of favor and are quite challenged.

But such growth, does it create vulnerability in the leveraged loan market or make it more resilient, do you think?

Has our view on the consumer and discretionary and those types of things changed as a result of whether it's the war in Iran or tariffs or whatever else we've been grappling with?

Yeah, well, I guess when you talk about Goldilocks, I guess that's a repeat theme that's really occurred in January, February of the last many years.

And as we've gotten into March, April, there's been significant macro headwinds that have been driven by geopolitical events.

So as we sort of peel that back, this year in particular given the the consensus view was that we were going to see um three to four rates um you know sort of decreases if you will that were gonna that very much that would benefit broader consumer broader corporates um as relates to the health um of their balance sheets um that that was you know certainly more constructive than um we we are today and you're absolutely right oil uh being higher and expectations i would say broadly from our perspective is um you know even with potential um positive outcomes that could come you know through the midterms uh more after the midterms as it relates to oil prices it's going to take significantly longer than what most expected for oil for the price of oil to come down for commodity prices to stabilize and as a result have a positive impact on where we are today.

Later on top of that, interest rates, which clearly are not only higher, but will be higher for longer, that's going to have continued implications for not only highly leveraged balance sheets, but for consumer spending.

So when we think about that combination, the tone of stability has without question deteriorated to a degree that we did not anticipate.

Now, that being said, when we think about portfolio positioning across the board, we tend to be more conservative and we favor higher quality borrowers in most sectors that we invest in.

do we how much do we now have to contemplate which business models become disrupted by this well

And here are his thoughts.

Yeah.

So as I mentioned, I think the credit concerns becoming liquidity concerns is something that, unfortunately, the market faces throughout different cycles and throughout history, if you will.

I think maybe starting from sort of the structural elements, these funds are doing exactly what they're supposed to do, right? Protecting existing investors, median liquidity that was deemed to be appropriate for these types of structures with these types of semi-liquid or less liquid assets in it.

So I think this reality of what's occurring in the market is not necessarily tied to its credit, but just broad market concerns.

So from a corporate credit which I think really, you know, important to sort of set the bedrock is broadly corporate credit remains on the sound footing.

Revenues, EBITDA across the asset class remains positive.

And here's what he had to say.