Private Credit Under Pressure: Liquidity, Distress, and Opportunity in Today's Credit Markets

In this episode of Masters of Risk, host Stewart Webster speaks with Lionel Jolie, Partner and Head of Credit at J.F. Lehman & Company, about the growing tensions beneath today's private credit markets and the opportunities emerging for disciplined investors. As private credit assets have expanded rapidly in recent years, liquidity pressures, redemption requests, and shifting market dynamics are reshaping the landscape for business development companies (BDCs), direct lenders, and secondary credit investors. Lionel explains how his team navigates both public and private credit markets, providing liquidity to lenders while evaluating stressed, illiquid, and often misunderstood opportunities. Drawing on more than two decades of credit investing experience, Lionel discusses the evolution of the BDC market, the rise of liability management exercises, and why traditional refinancing strategies are becoming increasingly difficult in a higher-rate environment. He also explores how investors can distinguish between companies facing temporary liquidity challenges and those caught in a true operational decline. Together, Stewart and Lionel examine the sectors attracting capital today—including aerospace, defense, and industrial infrastructure—and discuss how government spending, supply chain constraints, and asset scarcity can influence credit outcomes. They also unpack the growing popularity of private credit ETFs, the risks of liquidity mismatches, and why market stress may be more nuanced than the headlines suggest. A timely conversation for institutional investors, credit professionals, risk managers, and allocators seeking deeper insight into private credit, secondary markets, and the risks shaping the next phase of the credit cycle. More S&P Global Resources: Proactive Risk Intelligence | S&P Global The Definitive Risk Conference | S&P Global Masters of Risk | Season 4 Episode 5 Video: Beyond Diversification Credits: Host: Stewart Webster Guest: Lionel Jolie, Partner, Credit, F. Lehman & Company LinkedIn Editor: Carl Schmidt Producer: Caitlin Bray Published with Assistance From: Sophie Carr and Feranmi Adeoshun