What are the most rewarding and challenging aspects of your role?
Jonathan Bock: Change – both rewarding and challenging. It’s rewarding to be a part of a team that drives positive change for stakeholders. Additionally, it’s a challenge in that true directional change requires an immense amount of effort, teamwork and focus.
Allie Bradford: The most rewarding aspect is generating strong investment returns for our 20 million Canadian beneficiaries. We take the responsibility very seriously, and I view it as a great privilege.
The most challenging aspect is the hunt for the next deal. That is the fun of the job, but it’s an ever-constant pressure on my mind, especially right now.
Nelson Chu: By far the most rewarding aspect of my job is the ability to work with some of the smartest and most forward-thinking experts in the industry. These are individuals, some of whom have spent decades in traditional finance, who forewent all of that to pursue the entrepreneurial path as we push to fundamentally transform private debt markets for the better.
The most challenging aspect of the role stems from the role we play in the industry. We are the upstarts, the one who is trying to penetrate a market that has been dominated by incumbents for decades. Even still, we have made significant headway since we went live about a year ago and the little wins are all the more rewarding as a result.
Alona Gornick: The most rewarding aspect of my role is developing lifelong relationships with our private equity partners. I’m fascinated by the unique investment perspectives I encounter and value the genuine friendships that outlast the deals we discuss. While it can be a challenge to turn down certain opportunities, I’m encouraged by the trust our partners place in Churchill to call us for the next opportunity.
Josh Rosen: The most rewarding aspect of my role is being an ambassador for Aflac in the private lending community while being a good steward of Aflac assets for the benefit of stakeholders. It is also rewarding when industry peers seek my views on the market and credits. The biggest challenge is maintaining the right balance required to be a trusted partner of both managers and a fiduciary that maintains critical, objective oversight of them. That said, the goal always has to be reaching the appropriate conclusions, with truth and authenticity the primary objective.
Richard Wheelahan: New capital markets ideas, making first-time connections of capital providers to managers, or liquidity sources to users, is as thrilling at 39 as it was when I was an inexperienced finance lawyer at the age of 25. Innovation, whether you’re talking about new capital sources or lenders, or new types of capital structures for alternative asset managers, is certainly a challenge when trillions of dollars of capital are comfortable with the status quo. Success in spite of that challenge is what keeps our Fund Finance Partners team powered-up.
What is the most valuable career lesson you have learned?
AB: The importance of transparency and integrity, especially when it seems like no one is watching. Compromising in these areas for what may seem like gains in the short term never ends well over the longer term. This industry has a long memory and reputation is everything.
NC: Stay level because nothing’s ever as good as it seems but nothing’s ever as bad as it seems either. There are days when you had the best meeting ever and a week later nothing comes of it. There are times where you may lose a big client but there’s always an even bigger one out there waiting. Focus and execute, the rest will figure itself out.
AG: Create your own opportunities, don’t wait for them to land in your lap. Reach for roles that may seem unfamiliar or intimidating because you will undoubtedly surprise yourself. In that journey of pursuing new experiences, you can identify your true passions and confidently decide to do what you love.
JR: Be proactive and trust your vision. You don’t want to wait for things to happen because you will be unprepared when they do.
RW: The value of emotional intelligence will never depreciate. Conducting yourself and your business with dignity, awareness and respect is a virtuous cycle. It’s invaluable for leaders who sincerely try; it’s fatal for leaders who diminish its importance. It highlights men and women with potential; it is a “tell” for men and women who are likely to fail in spite of other strengths. Simply set the intention and see what happens.
JB: Two lessons. One, “define”. You’d be surprised how often proper definition and structure drives clairvoyance. Two, “do something”. The negative effects of indecision dramatically outweigh the cost of making a wrong choice. Imagine a batter who never swings because they are unsure if they strike out? Act, you’ll either succeed or learn – both benefit you.
What keeps you motivated day to day?
AG: The opportunity to deliver an upside surprise in every interaction. I love the challenge of impressing even the toughest clients.
JR: As the in-house expert for all of our direct lending mandates, I am fully responsible to our senior management and Aflac stakeholders to oversee our managers and provide the informed views needed to make the best strategic decisions.
RW: I’m ferociously driven by “my people”. My kids, and those who I am loyal to (and “their people”) motivate me. That means, my co-founder and his family, the rest of our team and their “people”, clients trusting us to do an important job (and their “people”), and so-on. Nothing about business is impersonal for me, so therefore, I don’t impute that detachment to any of my constituencies. My client’s CFO’s family is as much my motivation as my inevitable tuition bills for my inestimable kids.
JB: Progress. The business development company and private debt space is rapidly evolving – having an opportunity to participate in (and shape) that evolution, it’s a total blast.
AB: My team – particularly our young talent. Working in our industry can be challenging, so for me it’s critical to work on a team where I’m supported and there’s a high degree of trust, respect and integrity. The quality of young people joining our industry has never been higher. My experiences apprenticing and mentoring them keeps me motivated daily.
NC: The growth of the private debt market is astounding and second to none compared to any other asset class in private capital markets. I anticipate this is only going to continue as we remain in this low rate environment and it makes what we’re building here at Cadence all the more exciting.
What advice do you have for someone new to the industry or considering a career in your field?
NC: The best advice would be to focus on a specific segment within private debt. The industry encompasses so many different asset types, geographies and transaction types that it can be incredibly overwhelming. By focusing on one and learning the ins and outs of the segment, you will become known as the de facto expert for that niche.
AG: Bring your whole self to work, honour what makes you different and build a variety of mentor relationships. Your unique perspective is extremely valuable only when it is heard.
RW: Ask that question. Let your more-experienced colleagues help you determine how to prioritise. Don’t be a back-stabbing weasel. Your ambition is best served by a foundation of knowledge and a reputation for credibility and character. Bad shit will happen. Those with unassailable foundations will prevail.
JB: Display humble confidence. Be confident enough to act, challenge and even agitate. But be humble enough to realise true investment ‘sense’ is measured in years and reps.
AB: Do your homework and think carefully about the type of investing organisation you want to join. There can be key differences. So, understanding the mandate, approach to market and how a platform differentiates itself is key.
JR: Be honest, humble and willing to learn. You are new, so it is perfectly fine to admit that you don’t always know or understand everything. Private debt is a very nuanced and complex asset class; the deeper you go, the more you learn. So, one needs to stay motivated and curious and develop personal relationships with experts in the industry.
What would you like those outside the industry to know, or better understand, about private debt?
RW: Private debt is a label that we now use for an enormous part of the global financial system. Sure, it’s an asset class that came (as all asset classes) from a mispricing of risk, during a time when capital was comparatively scarce and supply nevertheless met demand. It’s also an established, resilient, part of the global economy. Private debt providers are here to stay, along with the capital. It might have been sweat equity in the 1960s; it might have been high yield in the 1980s.
JB: Tell a seasoned LP a private managers’ cost of capital (ie, promised return or dividend yield), fee structure and level of alignment (ie, principle investor vs asset manager), and they can easily tell you within a 95 percent certainty the likelihood for success – using simple ‘math’. Notice we didn’t even need to talk marketing pitches like ‘proprietary originations’, ‘best-in-class relationships’ and ‘private equity-style diligence’. Math and alignment levels the field – it’s where one should start and finish.
AB: How dynamic and creative private debt can be. Almost all private debt investments are unique in some way, so being flexible and providing solution-based financing is critical to staying relevant in our industry. Capital needs can vary greatly so being on a private debt platform with a true breadth of mandate provides constant opportunity for growth and learning.
NC: Private debt is an asset class that impacts millions of consumers and small businesses and yet it is either chronically misunderstood or is altogether unknown to the average person. It operates behind the scenes and is the real engine powering the global economy, helping businesses get the capital they need to grow or consumers the loans they need to achieve their next milestone in life. The more people understand how it works and just how far reaching its impact is, the better it will be for the growth of the industry.
AG: Private debt is a constantly evolving asset class, reflects an enormous variety of sub-strategies, and fulfils a critical role in supporting the growth and transition of over 80,000 US small and mid-market sized private businesses.
JR: Despite the public perception of private debt as a “risky” asset class, if you combine strong origination, solid credit underwriting and conservative structuring, you can outperform a number of broader asset classes.
How would you like private debt to evolve over the next decade?
AB: I’d like to see us continue to move the needle on diversity and inclusion. We’ve started to make some progress but there’s still much work to be done, especially in the upper ranks of organizations. I believe we can make a real impact in the next 10 years if we stay focused.
NC: The industry itself has been left behind a bit from the fintech innovation that has permeated across other sectors, such as retail banking and wealth management. There are clear pain points still in private debt when it comes to a lack of data transparency and inefficient workflows that would benefit tremendously from the broader fintech revolution.
JB: To know where we’re headed, take a look at where you’ve been. The private credit/BDC space rapidly evolved over the last 10 years to become more scaled, widely professionalised, properly financed (for some) and aligned with investors. I think a fair statement would be to hope for the same level of evolution we’ve seen over the last 10 years to be continued for the next 10.
AG: The private debt industry is on a tremendous growth trajectory, attracting significant amounts of capital. To capitalise on that growth and ensure innovation and long-term success, I think the industry will benefit greatly from continued diversity in perspectives and experience, particularly from female and other under-represented groups, over the next 10 years.
JR: I would like to see more transparency in the space, either through better indices or more robust reporting that allows for better assessment of managers’ performance.
RW: Private debt will never look like the depository institution landscape. It looks less-and-less like private equity every time you survey the field. The mysterious market that everyone cites is moulding management teams, capital bases, leverage sources, deal structures and regulatory standards that will serve the “market” (that is to say, the borrowers and “real economy” creators) for a generation or more. It’s a league of its own, and there’s plenty of field to cover.