Blue Owl Capital's Ivan Zinn - running the long race in private credit

Welcome back to the Alt Goes Mainstream podcast. Today’s episode is with someone who is running the long race — in investing and in running. We sit down with prolific long distance runner, Blue Owl Capital’s Ivan Zinn, who has been a pioneer in alternative credit and asset-based finance. Ivan has had a long career in private credit. He started at DLJ before joining Leonard Green & Partners and Highbridge Capital. He then joined HBK before founding pioneering private credit firm Atalaya Capital Management, where he was also the CIO. Ivan and team grew Atalaya to over $10B in AUM from 2006 to 2024 before being acquired by Blue Owl Capital for $450M (and $800M with earnouts). As part of the transaction, Ivan became Managing Director at Blue Owl and is the Head of Alternative Credit, where the firm is now expanding its footprint due to Atalaya’s expertise. Ivan is as prolific outside of the office as he is in it — he is a long distance runner, running 100 mile races, and was a NCAA All-American tennis player, which comes as no surprise given the discipline, focus and expertise required to excel at the activities he’s done throughout his career in work and sport. He’s also a Board member of the USTA Foundation. Ivan and I had a fascinating conversation about the evolution of private credit and the growth of asset-based finance. We discussed:How and why ABF has grown within the private credit ecosystem.ABF’s market structure and a “trip down main street.”The potential size of the ABF market.Why moving assets off bank balance sheets can help the financial system.Why private credit is a data rich asset.Where ABF fits in a portfolio.Why consumer credit is potentially misunderstood within private credit. Thanks Ivan for coming on the show to share your wisdom and expertise on private credit and ABF. Good luck to anyone keeping up with you on a long run though! You can also see a recent Q&A with Ivan about private credit and ABF on AGM here. Subscribe to Alt Goes Mainstream to receive the weekly newsletter every Sunday and all of AGM’s podcasts. A word from AGM podcast sponsor, Ultimus Fund Solutions This episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency. To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products. Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at gharris@ultimusfundsolutions.com. We thank Ultimus for their support of alts going mainstream. Show Notes 00:00 Introduction and Message from our Sponsor, Ultimus 01:57 Introducing Ivan Zinn 03:49 Parallels Between Running and Business 05:32 Early Days of Private Credit 06:52 Post-GFC Changes in Private Credit 07:31 Evolution of Atalaya's Business Model 08:21 Growth of Asset-Based Finance 09:38 FinTech's Role in Private Credit 11:09 Importance of Stable Capital Sources 21:09 Concentration Risks in Private Credit 22:27 Defining Asset-Based Finance (ABF) 22:53 Different Flavors of ABF 27:43 Investor Exposure and Risk in Private Credit 29:46 Direct Lending vs. Public Credit 36:02 Consumer Credit and Perceived Risks 37:36 Debunking the Cyclical Perception of Credit Risk 38:22 The Utility of Credit Cards During Financial Crises 38:44 The Resilience of ABS and Diversified Portfolios 39:07 The Role of Data Science in Credit Analysis 39:32 Surviving the GFC: A Benchmark for Credit Pools 39:53 Diversification in ABF and Private Credit 40:48 Selective Approach to Consumer Credit 41:36 The Importance of Manager Selection in Credit Investing 42:11 Private Market Transactions and Large Announcements 42:40 The Journey from Atalaya to Blue Owl 43:25 Challenges in Institutional Fundraising and Capital Formation 44:20 The Need for Diverse Capital Sources 45:43 Integration and Cultural Fit with Blue Owl 46:16 The Role of Data Science and Innovation in Credit 50:22 The Wealth Channel and Private Credit 50:50 Private Credit as a Fixed Income Replacement 52:34 Transparency and Market Structure in Private Credit 55:55 Educating Investors on Private Credit 57:48 The Evolution and Adoption of ABF 01:00:15 The Growth of Private Credit Market 01:01:28 Challenges and Opportunities in Private Credit 01:03:45 The Importance of Scale in Credit Investing 01:04:28 Vertical Integration in Financing 01:05:26 Relentless Forward Progress in Credit Investing 01:06:31 Memorable Investments and Risk-Reward Balance   Editing and post-production work for this episode was provided by The Podcast Consultant.