The Data Tapes

Setpoint's Bite-Sized Debt Newsletter: February Edition I

February 05, 2025

The Latest in ABS and Debt Markets

Welcome to The Data Tapes—your biweekly snapshot of private credit and ABS markets. In each edition, we bring you concise updates on debt financings, platform fundraises, data insights, market trends, and the latest from Setpoint.

🚀 What’s New at Setpoint

  • Build vs Buy? On Fintech One-on-One, CEO Stuart Wall explains why leading firms are choosing infrastructure over in-house builds for capital markets. Watch the clip.

  • Fresh off winning Opportunity Austin’s Growth Catalyst Award and C-Suite Leader of the Year, Ben Rubenstein (Co-Founder & President) and Michael Lam (Co-Founder & CIO) sat down with Opportunity Austin to discuss what we’re building and why it matters.

  • Meet Us at SFVegas: If you're heading to SFVegas, we'd love to connect! Share your details to set up a meeting or join us for our special events.

💸 Debt Financings & Acquisitions

💰️Platform Growth

📈 Visuals

 🗣️ Market Commentary

  • “We sit in a very interesting place in the middle of that ecosystem. We have the ability to distribute credit and interesting investment opportunities to our clients through the typical originate and syndicate process. We have the ability to originate and use our balance sheet. We have the ability to originate and direct to our asset management franchise. And so, the formation of our capital solutions business that we put forward is a way for us to take some of the advantages we have as a firm sitting in the middle of this ecosystem. I think you're going to see good secular growth in private credit lending and we're certainly in a very, very interesting position to participate in that....” - David Solomon, Goldman CEO 

  • “As we move into this asset-based area, where the penetration from us and the industry is very small, we think this is going to grow a lot. And I think you'll see us partnering more and more with banks oftentimes on a white label basis where there may not be a big announcement, but they want to move some things off their balance sheets as they want to try to drive higher ROEs we just see. And it's not different than direct lending or opportunistic, which is obviously very tied to transaction activity. What's nice about the private investment grade and the ABF, it's really just tied to the basic economy. It's tied to things like consumer finance and rail car finance and a bunch of fundamental things in commercial residential real estate that are just the essence nuts and bolts to the U.S. economy.” - Jon Gray, Blackstone President & COO

  • ”Total credit AUM is about $250B. The private credit piece is about $110B. And of that $110B, we've got about $70B in asset-based finance and another $40B in direct lending. In asset-based finance those numbers continue to grow at a pretty impressive rate. That compares to roughly $50B at Q4 of 2023. So we're up over 40% on a year-over-year business basis rather, so big businesses with healthy growth. I think in terms of your question in the outlook, both the ABS is a massive market, $6T on its way to $9T.  As it relates to banks and bank partnerships, we see their activity – we expect the broad trends to continue. I think when we look overall in the industry, banks today are well capitalized and they have healthy liquidity, right? Capital ratios are up. I know you know this very well. What that brings is a real focus on ROE and banks have a finite amount of risk-weighted assets to generate that ROE. So a bank can be an excellent originator. But if there aren't additional economics, if they aren't recurring fees or other revenues, they may not be an excellent holder. And that creates opportunities for us. Because as banks make these decisions and how and where they're going to allocate their RWA, some business lines are going to be kept, they're going to be optimized, they're going to be scaled and others are going to be shed. And in some ways, it almost feels like there isn't much of it in between. And so this dynamic in our view, isn't going to change. Now maybe we see a little less SRT activity at the margin, but the broad trends, again, aren't changing, lots of continued opportunity for us.” - Craig Larson, KKR Head of IR

  • “So, let's start with what people are investing in. People suggest there's $12 trillion to $13 trillion in 401(k). That'll be there on average for 50 years. These people are, for the most part, invested in daily liquid stock index funds for 50 years. Why? Well, that was history. That's just what people did. And what happened to their investment is, it's done well, I won't say that, but they are now – 10 stocks are now 40% of the S&P, and their returns are levered to NVIDIA. We basically have levered the retirement system of the country to NVIDIA…Everywhere in the world, where privates – and I'm going to use the word private, not alternative – has been added to retirement solutions, the results are not just a little bit better, they're 50% to 100% better. We are on that journey. Plan sponsors understand this. Investment managers understand this. What we have is a litigation culture that has focused historically on fees that has prevented widespread allocation to private market solutions and a record keeping infrastructure that has been slow to adapt. I believe we are at the very, very beginning, approaching a $12 trillion market, admittedly, in the current environment, with some handcuffs on.” - Marc Rowan, Apollo CEO

📖 What We’re Reading & Listening To