The Credit Edge by Bloomberg Intelligence Oaktree Worries About Lack of Discipline in Rush to Fund AI
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Nov 13, 2025 Danielle Poli, a portfolio manager at Oaktree Capital Management, shares her insights on the cautionary trends in credit markets. She highlights the alarming lack of discipline as investors rush to fund AI-related ventures, questioning the sustainability of such hype. The discussion also covers strategies for finding strong returns in collateralized loan obligations and real estate debt, as well as concerns about credit cycles and the impact of liability management exchanges. Poli emphasizes a disciplined investment approach amidst growing competition for capital.
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Public And Private Credit Are Symbiotic
- Private and public credit are converging into a symbiotic relationship rather than rivals.
- Private lenders must be paid for illiquidity as the yield differential compresses but persists in parts of the market.
Three Divergent Default Patterns
- Default dynamics vary: low in high yield, elevated in broadly syndicated loans, and opaque but meaningful in private credit.
- Oaktree leverages distressed expertise to target rescue financing and avoid higher‑risk broadly syndicated deals.
Stay Disciplined And Blend Exposures
- Avoid investing in everything; be willing to see portfolio yield fall rather than stretch for risk to maintain deployment.
- Blend public and private exposure to stay tactical and preserve optionality for dislocations.
