Is the noise around private credit overblown, or is it a US-specific story? Patrick Schoennagel, Managing Director and Co-Head of Houlihan Lokey’s Capital Solutions Group, sits down with Mike Griffin, Partner at Sixth Street and Co-Head of the firm's global direct lending business, to unpack how European private credit evolved out of post-GFC bank deleveraging into a multi-billion-dollar asset class. Mike shares Sixth Street's philosophy of flexible, integrated capital, why structural differences make Europe fundamentally different from the US market, and how the firm is thinking about software, AI disruption, and the next credit cycle. The conversation also touches on fundraising discipline, sector rotation, and where European private credit is headed over the next decade.

Key Insights:

• Structure, not sentiment, separates Europe from the US. European private credit is largely built on long-dated, committed drawdown capital rather than redeemable retail structures, which means the liquidity mismatches driving US headlines are much less relevant on the continent.
• Flexibility across the capital structure is a competitive advantage. Sixth Street's integrated, non-siloed platform lets the firm move fluidly between senior debt, structured capital, and hybrid solutions, positioning it to write both $50 million and billion-dollar-plus checks depending on what a situation requires.
• Software's stress is a credit story, not just an AI story. High leverage applied against aggressive growth assumptions during 2020–2022 is now being revisited industry-wide, a pattern Sixth Street views as a normal part of the credit cycle rather than something unique to AI disruption.