Exceptional breakdown of the core pathologies. The 'redemption at NAV' put option is indeed a ticking time bomb, but the most dangerous transmission channel is Issue #3: investment demand driving lending supply. This inverts the credit cycle for mid-market businesses. When the fund inflows slow or reverse, credit availability for otherwise viable companies doesn't gently tighten -it slams shut, as the fund's incentive is to gate, not to patiently steward.
We analyze these transmission channels between institutional capital flows and business liquidity at Trade Credit & Liquidity Management (TCLM). https://tradecredit.substack.com/
Exceptional breakdown of the core pathologies. The 'redemption at NAV' put option is indeed a ticking time bomb, but the most dangerous transmission channel is Issue #3: investment demand driving lending supply. This inverts the credit cycle for mid-market businesses. When the fund inflows slow or reverse, credit availability for otherwise viable companies doesn't gently tighten -it slams shut, as the fund's incentive is to gate, not to patiently steward.
We analyze these transmission channels between institutional capital flows and business liquidity at Trade Credit & Liquidity Management (TCLM). https://tradecredit.substack.com/
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