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Strategies & Market Trends : Value Investing
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To: Grommit who wrote (78675)12/9/2025 7:49:30 AM
From: Sean Collett   of 78748
 
Hello Grommit,

ON the surface perhaps that's so, but I challenge if one looks deeper the risk is the same. This time it's private credit. For example, you have Pacific Investment Management and Blue Owl providing $29B to META to build their data center where PIMOCO setup $26B of debt and Blue Owl was providing $3B in equity - backed by the data center assets which are not worth $29B.

This is the off-balance sheet joint-venture META created with Blue Owl.

EcoDataCenter raised $703M in private credit from private credit.

So there is plenty of debt here and while a good chunk of equity has been used to finance, there's still plenty of risk. Especially as private credit has grown leaps and bounds lending to riskier and riskier investments. Isn't it interesting that Bally's couldn't get bank funding to term their debt out but Private Credit gave $1.1B? Sure not a data center, but one domino here starts a chain.

IMO - risk is in leverage use the same as ever before.

-Sean
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