This episode explores the complexities of private credit liquidity, particularly within the context of ETFs, and the ongoing legal battle surrounding Endeavor's acquisition by Silver Lake. Against the backdrop of a global industrial renaissance demanding massive capital investment, the discussion delves into the intricacies of Endeavor's ownership structure, including its majority stake in TKO (the merged WWE and UFC). More significantly, the rising value of TKO post-deal has led Endeavor shareholders to challenge the agreed-upon acquisition price, prompting potential appraisal lawsuits. For instance, the hosts debate the implications of the 2017 Dell case, which shifted the legal landscape of appraisal cases, making it harder to challenge merger prices. As the discussion pivoted to private credit ETFs, the hosts questioned the necessity of ETFs given the existence of BDCs, highlighting concerns about liquidity risks. In contrast to the view that private markets should remain private, the hosts also considered the potential for increased liquidity in private credit markets in the future. Ultimately, the episode showcases the evolving dynamics of private markets, the challenges of navigating complex legal frameworks, and the ongoing debate about the optimal structure for retail access to private credit investments.
