The 4Sight Report

June 24, 2025

Risk Repricing Deepens—But Opportunity Expands in Focused Niches

Private lenders are becoming more selective, stepping back from speculative deals and leaning into resilient, well-underwritten opportunities. This recalibration may feel like contraction—but for targeted verticals like physician lending, it’s an expansion of competitive edge. At 4Fi, we continue to prioritize lending into sectors with strong credit anchors and low cyclicality.

Macro Brief

• U.S. Services PMI rose to 55.3 in June, suggesting healthy service-sector demand despite rate headwinds. (S&P Global, June 21)

• Initial jobless claims fell to 216,000, highlighting labor market resilience. (DOL, June 20)

• Fed Chair Powell affirmed “restrictive stance is still appropriate” but acknowledged improving inflation trends. (Bloomberg, June 24)

Private Credit Update

• HPS Investment Partners deployed $3.2B in new commitments, with emphasis on cash-flow generative sectors. (HPS, June 20)

• Goldman Sachs sees tighter pricing but notes increased demand for quality senior loans. (GSAM, June 21)

• Private credit defaults rose modestly to 2.4%—but remain largely concentrated in cyclical, sponsor-driven credits. (KBRA, June 20)

What It Means for You

• The pullback from generalist credit strategies is creating space for niche-focused, high-integrity originators

• Physician lending remains a structurally attractive segment: stable income, strong credit, underserved by traditional lenders

• 4FiMD continues to deliver fixed-income style exposure with borrower alignment and capital efficiency

Chart of the Week

Private Credit Default Rate (Annualized, Rolling 3-Month)

MonthDefault RateMarch 20251.7%April 20252.1%May 20252.4%

Source: KBRA, June 2025

Quote of the Week

“When capital gets selective, specialization wins.”
— Managing Director, Direct Lending Fund (June 21)

Sources

S&P Global, U.S. Department of Labor, Federal Reserve, KBRA, Goldman Sachs, HPS Investment Partners, Bloomberg