Episode

Key Takeaways

Wellington Management, with $1.2 trillion in assets, runs a significant growth lending strategy.
Growth lending (venture debt) finances businesses against enterprise value, not cash flow.
Growth lending maintains a low 1% historical loss rate due to seniority and late-stage focus.
Private credit issuance reached a record $60 billion in 2024 following SVB's collapse.
Growth lending offers equity investors levered returns and enhances overall exit returns.

Wellington Management, founded in 1928, manages over $1.2 trillion in assets across public and private markets.
The firm's private credit division includes investment grade, real estate, and growth lending teams.
Jeff Chapman leads the growth lending strategy, focusing on innovative companies and leveraging public equity analysts for private credit transactions.

Growth lending historically maintains a low annualized loss rate of about 1%, benefiting from lending seniority.
Lenders primarily target late-stage, venture-backed companies with strong fundamentals and clear profitability paths.
These companies are often the 'last money in' before a liquidity event or exit, contributing to lower risk.

Wellington Growth Lending differentiates itself by leveraging the parent institution's extensive resources for diligence and sourcing.
The firm utilizes its broad investor ecosystem to source deals and offer a full spectrum of capital solutions, including credit, private equity, and public market support.
They focus on late-stage venture and growth-stage companies with $15-20 million in revenue, scalable to hundreds of millions.

Growth lending offers benefits beyond financial capital, such as providing levered returns for equity investors.
It also enhances overall returns for companies upon exit.
Wellington's growth lending team collaborates with other internal teams, facilitating introductions to equity or public market opportunities.
A dedicated value creation team further assists portfolio companies in maximizing their success.

Following Silicon Valley Bank's collapse in 2023, private credit markets saw increased lender activity in 2024, leading to a record $60 billion in loan issuance.
In 2025, private credit issuance continues at the same pace as 2024, with approximately $30 billion issued so far.
However, 2025's capital is concentrated in 30% fewer companies, resulting in larger loans to fewer entities.
Venture capital experienced fundraising drops between 2023-2025, while 2025 deal activity picked up, especially for AI growth-stage companies.