I've looked throughout my career for asset liability mismatches, and I truly believe that

asset liability mismatches cause liquidity crunches, and liquidity crunches can cause credit

crunches. Credit is correlated when it gets stressed. The bare case, which I'm not saying it's

going to happen, but what happens is you get redemptions, you get some real defaults,

you get for selling of private credit. And in the interval funds, you just run out of what's

liquid and the bar to gate is really high. That goes on a feedback loop of where's the actual bid

for private credit.

It's hard to say.

I'm Ted Seides, and this is Capital Allocators.

My guest on today's show is Kieran Goodwin, partner at Saba Capital, a $6 billion

hedge fund manager that seeks to identify dislocations in credit and equity markets to

generate convex returns in volatile times.

Kieran has been one of the top credit traders on the street for the last three decades,

across roles in investment banks in the 90s and early 2000s, King Street, his own hedge fund,

Panning Capital, and most recently Saba that he joined in 2024.

Our conversation covers a tour of Kieran's background, including early experience with credit

derivatives, growth at King Street, lifespan of panning, downtime between stints, and re-engagement

with Boaz Weinstein at Saba.

We then turn to risks in the private credit market, including its rapid growth, asset

liability mismatches, pricing marks,

leverage, liquidity, default risk, and the potential for reflexive problems.

Kieran shares how managers should navigate the environment and how he's positioning Saba to benefit.

...