Timothy Lyne
Private credit is surging throughout the world as investors discover the attractive risk return benefits. It's a floating rate instrument, its senior secured, so it offers downside protection.
Rebecca Darst
Welcome to Elements of Private Credit from Antares Capital. A series of conversations exploring the rapidly evolving private credit marketplace from a true industry pioneer. In this series, you'll hear from Antares investment professionals on their rigorous process, their stakeholder alignment, and their commitment to positive outcomes, setting the stage for Elements of Private Credit, Tim Lyne, it's a pleasure speaking with you today.
Timothy Lyne
Excited to be here. Thank you, Rebecca.
Rebecca Darst
Private credit as an asset class has become one of the fastest growing areas in alternative investments. What's behind the surge in interest and what does it mean for the broader market?
Timothy Lyne
So private credit encompasses numerous other asset classes: real estate, private infrastructure and then direct lending would be another one of those asset classes. Direct lending is what Antares does. We do it to sponsor owned companies. We're making loans directly to the company. Different than kind of the broadly syndicated market. The benefits, really, of the direct lending market are its floating rate, it offers significant downside protection because we're sitting at the very top of the capital structure and typically below us, it's all equity from the private equity sponsor. And ultimately that direct lending produces attractive risk adjusted returns for our investors over a long period of time.
Rebecca Darst
So evolution of the investor base has been a defining trend in the private credit asset class over the past 30 years. In your view, was this a natural evolution of the value proposition of private credit, or was there a specific catalyst?
Timothy Lyne
The shift was inevitable. Investors around the globe were discovering the benefits of private credit. Then it started to move down from there into the ultra-high net worth and family office sectors.
Rebecca Darst
Antares is celebrating its 30th anniversary this year. How has the firm evolved over the past several decades?
Timothy Lyne
It's a really interesting story. So, we founded the company in 1996, and we decided to found Antares with a couple of key tenants. We owned the company and we made the credit decisions. One of the other benefits was we were very quick, nimble, so we were able to respond to sponsors when they would send us deals. Many of those things sound pretty basic today. Back then, they were big differentiators. So, some of our sponsors have trusted us to finance more than 100 transactions for them over a long period of time. Folks that have been in the business for a long time have an incumbent portfolio. They have 200, 300, we have almost 500 companies in our portfolio. Origination is crucial, and that comes from developing relationships with private equity sponsors. It takes a long time to build that track record.
Rebecca Darst
What you describe in your approach to sponsor relationships reflects a deeper alignment with your counterparts. Can you talk about how alignment shows up in the way you manage capital and show up for clients?
Timothy Lyne
Alignment is a key part of our success. We're owned by CPP, the Canadian Pension Plan. The Canadian Pension Plan invests in every single deal that we finance. Our employees invest in every single deal that we finance. So, when investors are evaluating us to manage their money, the owner of the company invests in every deal, the management team invests in every deal. Our success is tied directly to client outcomes.
Rebecca Darst
For advisors who may be newer to private credit. What's one mindset shift or key insight that you'd encourage as they begin to explore the asset class more fully?
Timothy Lyne
Investors need to approach direct lending as a core allocation that will provide consistent income and stability over a long period of time.
Rebecca Darst
Antares CEO Tim Lyne, it has been great speaking with you and your team is a testament to what you've built up over 30 years. Viewers are in for a treat.
Timothy Lyne
Thank you so much for inviting me to be with you today, Rebecca. I really appreciate it.
Private credit is an established asset class. Direct lending, the largest non-investment grade segment which Antares’ pioneered in the mid-1990s, plays a critical role in today’s financing ecosystem and provides investors with attractive risk adjusted returns.
Why It Matters
Its growth reflects both structural changes in lending markets and a consistent ability to deliver durable outcomes.
- Structural Demand: Bank retrenchment has created a sustained need for alternative sources of capital.
- Direct Lending Model: Capital is provided directly to borrowers, enabling alignment, flexibility, and certainty of execution.
- Proven & Resilient: Long track record of delivering consistent real income and attractive risk-adjusted returns across cycles.
What to Focus On
Understanding private credit starts with how the market is built and operates.
- Relationship-Driven Ecosystem
Origination capabilities and incumbent deal flow are crucial. Sustainable deal flow is driven by long-standing, trusted relationships with private equity sponsors and borrowers. - Long-Term Orientation
Private credit should be thought of as a core allocation that provides consistent income and stability. Investments are held over time, with returns driven by credit fundamentals – such as company performance and cash flow – rather than trading activity. - Underwriting Discipline
Rigorous credit analysis and structuring focused on protecting capital.
The Bottom Line
Private credit has become a foundational part of modern capital markets, shaped by structural demand and a disciplined approach to lending. At Antares, this is reflected in long-standing sponsor relationships, a consistent credit culture, and a focus on delivering stable, income-oriented outcomes across market environments.