Private credit is gaining prominence as a crucial investment strategy. With traditional lenders facing significant challenges and regulatory pressures, private credit has emerged as a viable alternative, offering unique opportunities for investors. At the forefront of this trend is Peachtree Group.
In this Q&A, Greg Friedman, Managing Principal and CEO of Peachtree Group, provides valuable insights into why private credit is increasingly relevant, especially in the current market environment.
Q&A with Greg Friedman, CEO of Peachtree Group
Q: What is Peachtree Group, and how does it operate within the commercial real estate sector?
Greg Friedman: Peachtree Group is a vertically integrated private equity firm that invests across the commercial real estate spectrum. We strategically invest up and down the capital stack, meaning we take positions both in debt and equity across various types of commercial real estate. This diversified approach allows us to capitalize on a wide range of opportunities within the market.
Q: Why is private credit becoming increasingly important, and why now?
GF: As a firm, we've been heavily invested in private credit for nearly 14 years, so this isn't new territory for us. However, the significance of private credit has grown recently due to the struggles faced by traditional lenders, particularly banks, which account for more than 50% of the commercial real estate lending market. These banks are facing regulatory pressures and challenges within the real estate market, making it difficult for them to lend at the levels they once did. This shift has created a void, and private credit has stepped in to fill it.
Q: How is Peachtree Group uniquely positioned to capitalize on the growth of private credit?
GF: The current void in traditional lending has presented an incredible opportunity for us. As banks pull back, we’re able to step in and lend at lower leverage points, which means we're taking on less risk while still achieving high returns. In many cases, there turns we’re seeing from our private credit investments are comparable to those we would expect from equity strategies, but with significantly less risk because we're only exposed to credit risk. This is precisely why we are enthusiastic about our private credit strategy today.
As traditional lending sources face mounting pressures, private credit is emerging as a powerful and flexible alternative for investors and borrowers alike. Learning about private credit through the perspective of seasoned professionals is the best way to understand its potential. If you want to learn more about Private Credit follow our “What is Private Credit in CRE” series on the Peachtree Group YouTube Channel.