Leyla Kunimoto

I can't believe it's come to this, but here's a visual representation of this ridiculous structure. Ladies and gentlemen, a tertiaries fund:

- bottom: actual portfolio companies, purchased by PE Funds I and II (with respective LPs)

- a secondaries fund comes along, buys LP interest in Funds I and II from some LPs (gives them money, in exchange gets their stake in the fund). This secondaries fund raises money from other LPs

- but now, we have a tertiaries fund (!!) This fund will buy secondary interest in secondaries funds (by raising money from other LPs).

And no, this is not a second sale of those original fund stakes. This is a sale of stakes in the secondary fund.

Does anyone even remember how many layers back the actual value is created???

P.S. not to be confused with CV vehicles (although CV vehicles are a subset of a secondaries fund bucket) - stay tuned for that visual..

Want a deeper dive on secondaries? Here you go:
https://lnkd.in/g44zixBK

LP asking why IRR says 20%, when there haven’t been any distributions

“So the borrower had negative EBITDA, pledged the same collateral to three other lenders, and you gave them a PIK toggle loan?”

Apollo moving to daily marks for private credit… Where do I even begin?

Let's start with this: calling this a “transparency win” would be a stretch.

Yes, this does move us many steps closer daily liquidity ("Private credit funds, meet 401(k) plans!") That’s the real headline.

But let’s not pretend daily marks are inherently more accurate than quarterly ones.

If the inputs are subjective, increasing the frequency doesn’t magically make them objective.

If the goal is to actually improve investor understanding, the industry is focusing on the wrong layer. What would help?

Real visibility into the underlying borrowers:
- Unadjusted EBITDA
- EBITDA growth (YoY)
- Interest coverage
- Valuation multiples used in marks

Everything else is just a more frequent estimate.

An opaque process, run more often, is still… opaque. My (unsolicited) $.02

Regional banks discovering why private credit pays double-digit yield

The gym I've been a member of for a decade got acquired by private equity (backed by a big name you'd know) a few months ago. It's been fascinating to watch the "operational improvements" from the customer POV.

So far:

- rates were jacked up almost immediately

- they installed a coffee machine and hired a bunch of clueless kids for the front desk

- best part: the club can no longer help with any membership requests. It all has to go through corporate (via app or email, they don't have a phone line, lol)

A few weeks ago, our teenager Number 1 asked for a membership. A seasoned buyer of gym memberships, I braced myself and waited for January 1 promotions.

It's now January 6, my kid is yet to have his membership.

I've been jumping through hoops for 6(!!) days to get someone to reply to me and take my money:

- 2 online requests (timestamped with 24-48 hour promised reply time) -- no response

- 2 phone calls to the club -- they can't do anything

- Tried scheduling a Zoom call through the app - my club is not even listed on their website.

IN JANUARY, folks. I'm begging a gym to take my money and they won't return a phone call.

Good grief, how are they going to make it?

As a side note, what kind of returns did they promise their investors, and how do I short a non-listed PE fund???

“Say “quarterly liquidity” one more time”

Ares is bundling €3 billion of LP stakes in its flagship European direct lending fund for a secondaries sale. Let's talk about why for a second:


Ares Capital Europe IV closed in July 2018 at its €6.5 billion hard cap.

That fund is now 8 years old.
(𝘈 𝘵𝘺𝘱𝘪𝘤𝘢𝘭 𝘱𝘳𝘪𝘷𝘢𝘵𝘦 𝘤𝘳𝘦𝘥𝘪𝘵 𝘧𝘶𝘯𝘥 𝘭𝘪𝘧𝘦? 7–8 𝘺𝘦𝘢𝘳𝘴)

So why is nearly half the fund being sold in the secondary market at year 8?

It's not that the loans went bad. It's that the loans won't leave.

Average loan duration in private credit has stretched from 2–3 years to 4–5 years as PE exit activity dried up. The borrowers aren't refinancing. The sponsors aren't selling. So the capital just sits there.

Meanwhile, LPs need that capital back:
- They have re-up commitments.
- They have allocation targets.
- They have their own expenses and capital needs

So what do you do if you're a GP with $6.5 billion of aging European direct lending assets and a room full of LPs who want their money back?

You bundle the stakes and go to the credit secondaries market.

The numbers for said credit secondaries market:

~$6B in 2023
~$11B in 2024
~$20B in 2025
$20.4B in H1 2026 alone

And then there’s the fun part: Ares raised $7.1 billion in January for its inaugural credit secondaries strategy.

So Ares is simultaneously one of the largest sellers of LP stakes and one of the largest buyers.
(𝘐'𝘮 𝘯𝘰𝘵 𝘦𝘷𝘦𝘯 𝘨𝘰𝘪𝘯𝘨 𝘵𝘰 𝘮𝘢𝘬𝘦 𝘢𝘯𝘺 𝘤𝘰𝘮𝘮𝘦𝘯𝘵𝘴, 𝘺'𝘢𝘭𝘭 𝘤𝘰𝘯𝘯𝘦𝘤𝘵 𝘺𝘰𝘶𝘳 𝘰𝘸𝘯 𝘥𝘰𝘵𝘴)

I'm going to kill the reach on this post, but I'll throw links here.

👉 Deep dive into private credit secondaries: https://lnkd.in/gr7dmh8m

👉 And here's a case study on a fund that invests in PC secondaries: https://lnkd.in/gWKVeShj

Don't ask me how I did this, I have no clue. The newsletter was born out of sheer frustration:

I had never seen a playing field where information imbalance was as extreme as it is in private markets.

It was infuriating watching some GPs with marketing skills raise vast sums into obviously doomed deals, while most retail LPs struggled to tell good operators from the not-so-good ones.

The problem is not isolated to the lower middle market, btw. On the top end you don't have access to the manager at all, and disclosure is minimal.

If I learned anything, it's this: better branding ≠ better underwriting.

✍ So I started writing.

With no marketing budget, no followers, and no experience writing newsletters. If I knew how hard it would be I might not have begun 🤣

Yet the response has been incredible from day one, and I'm very grateful.

📍 I have never promoted GPs, and I have no plans to start. There are too few independent voices in this ecosystem. I intend to remain one of them.

Here's the value proposition: I can help you become a better investor by showing you how the sausage is made, so you can vet GPs and offerings with confidence.
(also, you'll get a ton of memes)
You can subscribe here: https://lnkd.in/gsxEASyW

👉 If there is something you would like me to dig into, comment, DM, or email. I am here to help.

P.S. I would be remiss not to mention Kris Rymer, CPA who was there at the start. He has since moved on to bigger and better things (with my full support). I'm grateful for his friendship.

Risk on, people. The financially prudent amongst us will be eaten alive by inflation —

It doesn’t matter that it’s an everything bubble.

What matters is that investors will continually be left with a dismal choice:

- take on risk in search of yield
- or sit on a melting ice cube of cash equivalents

Deeeeep in my heart, I’m a value investor. But as I get older, I realize the wisdom in the old adage:

“Don’t bet against the Fed”

A great read from Financial Times on insurance ratings of private credit loans. TL;DR:


- small credit rating agencies are now providing the vast majority of private ratings on securities -- there are concerns that these ratings are inflated

- meanwhile, US life insurers are the biggest buyers of such debt

What does holding assets with inflated ratings do to insurance companies?

It lowers the amount of buffer they have to keep on the balance sheet.

This doesn't matter during the go-go times, but:

"The lack of transparency and liquidity of private loans makes them tricky to value accurately, increasing the risk of “fire sales which can amplify price movements during periods of economic stress", according to BIS"

(Link in comments)

This is my personal list of top 10 books (as it stands now) - yes, it seems random. Yes, I read most of them years ago. Yes, I’ll update in 2026 😁

👉 Get the full story here — along with top 10 posts of the year from Accredited Insights: https://lnkd.in/givW7VtQ

P.S. What should I add to the list? Please drop a comment!

The current state of affairs:

The biggest risk to an evergreen fund might not be the portfolio:



it might be the source of capital.

According to the FT, UBS advised some clients to reduce their private credit exposure in late 2025.

Turns out, 60% of Blue Owl Technology Income Corp. (OTIC) had reportedly been raised through UBS clients.

When a single distributor represents that much of your investor base, a change in allocation guidance turns into a redemption problem.

Spoiler alert:
As an outside investor, you usually have no way of knowing how concentrated a fund's distribution channels really are.

Critical information, if you ask me..