What 100 Years of American Finance Tells Us About Today

Alan Waxman argues the ‘factory model’—not credit quality—is the root cause of today’s private capital stress, and predicts recalibration before it turns systemic.

• Private capital grew from $2T pre-GFC to $14–15T today; private credit alone grew from $500B to $2T, filling the gap left by Basel 3 bank constraints.
• FRE multiples for alt managers expanded from 10–15x (early 2010s) to 25–30x+ today, creating equity incentives to maximize AUM over investment returns.
• The ‘factory model’ always starts on the liability side: raise capital as fast as possible in the simplest, narrowest strategy, then industrialize deployment to match—degrading underwriting standards.
• Perpetual private BDCs sold to the wealth channel as ‘semi-liquid’ are illiquid assets with quarterly redemption windows; Waxman says there is no such thing as semi-liquid, and redemptions are now exceeding the 5% limit.
• Sixth Street has zero perpetual private BDC exposure despite running direct lending since 2001; Waxman attributes this to ‘clarity of purpose,’ not inability to raise.
• Waxman calls current private credit stress a ‘recalibration gift’—not systemic—because it is occurring against a relatively healthy economic backdrop rather than a deep recession.
• AI disruption is not a software-only story: any company in any industry that is slow to adopt agentic capabilities risks the same margin compression software companies face now.
• Waxman’s personal productivity system is a handwritten one-page ‘brain’: left side covers five strategic priorities, key people, and health; right side captures creative ideas tracked over 25 years.

2026-04-08 · Watch on YouTube