Lower middle market direct lending remains one of the most structurally underserved segments in private credit. As traditional banks have stepped back, specialist lenders are playing an increasingly important role in providing capital to established, sponsor-backed businesses.
In this episode, Keshav Rajagopalan is joined by Tas Hasan, Managing Partner and Chief Operating Officer at Deerpath Capital, PGIM's lower middle market direct lending platform.
Together, they explore the concept of the "missing middle" in private markets, how Deerpath sources and underwrites opportunities at scale, and why discipline, consistency and relationships remain central to success in this segment. Tas also shares perspectives on today's opportunity set, the role of covenants in credit investing, and how lenders are thinking about emerging themes such as AI through the lens of cash flow durability.
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Key Takeaways:
● What Lower Middle Market Direct Lending Is and Why It Matters – [03:00]
● The "Missing Middle" Opportunity in Private Credit – [04:00]
● Why Structural Inefficiencies Continue to Support the Opportunity Set – [07:00]
● Understanding AI Risk Through Cash Flow Durability – [10:00]
● The Importance of Covenants as a Tool for Active Risk Management – [17:00]
● How Sponsors Influence Outcomes in Lower Middle Market Lending – [21:00]
*The views expressed are those of the speakers at the time of recording and may not reflect their current opinions. This content is not investment advice.*
Learn More:
• @PGIM on X: https://twitter.com/pgim
• @PGIM on Instagram: https://www.instagram.com/pgim/
• PGIM on LinkedIn: https://www.linkedin.com/company/pgim
Shareables:
"Lower middle market lending is not a niche — it's a large part of the market that has simply been under-served." — Tas Hasan
"As a lender, our job isn't to predict the future — it's to protect against what can go wrong." — Tas Hasan
"In direct lending, covenants are not about control, they're about early engagement." — Tas Hasan
"Lower middle market lending is not a niche — it's a large part of the market that has simply been under-served." — Tas Hasan
