As private credit tightens and competition intensifies, SLR Capital Partners’ Mitch Soiefer explains why specialization, structure and hands-on portfolio management matter more than ever.
In a recent episode of the ABF Journal podcast, Editor in Chief Rita Garwood sat down with Mitch Soiefer, partner and head of lender finance at SLR Capital Partners. In a wide-ranging discussion, they covered the state of private credit as the year winds down, where capital is flowing, how borrowers are behaving and what lenders need to do to outperform heading into 2026.
Rita Garwood: To start, can you tell us a little about yourself and what you do at SLR?
Mitch Soiefer: Absolutely. I’ve been with SLR for almost 17 years. I’m a partner at the firm and I run our lender finance business, which is the business of financing other finance companies.
SLR is a multi-strategy credit manager with four primary verticals: asset-based lending, lender finance, healthcare and life science, and cash flow lending. I oversee the lender finance vertical.
Garwood: We’re approaching the end of the year. How would you describe the state of private credit today as we head into 2026? What’s changed most meaningfully in the last 12 months?
Soiefer: There’s been a lot of transformation over the last 12 to 24 months. The biggest thing we’ve seen is significant capital formation in private credit, particularly in the upper middle market and broadly syndicated loan space.
That part of the market has become very competitive from a pricing standpoint. At the same time, M&A volume in 2025 has been lower than in prior years. So you have a lot of capital chasing fewer transactions on the cash flow side.
As a result, we’re seeing more opportunity in specialty finance verticals like asset-based lending, lender finance and life sciences, where capital formation hasn’t been quite as heavy.
Garwood: With tighter credit conditions creating a more selective market, where are you seeing opportunities open up for disciplined lenders? And where are you seeing pullbacks?
Soiefer: We’re finding more opportunity in areas that are less saturated and where there’s a bit of a complexity premium. That complexity might come from the amount of operational work required, deeper diligence or specialized sector knowledge.
On the cash flow side, that could mean healthcare. In asset-based lending and factoring, there’s a lot of labor involved: verification, analysis, ongoing monitoring. That creates opportunity. The same is true in life science lending and lender finance, where specialized expertise really matters.
Those are the areas we’ve been expanding in during 2025, and we expect that to continue into 2026.
Garwood: Specialization and sector depth have been differentiators for a while now. Which areas demand the most expertise today, and how is SLR investing in specialization?
Soiefer: I completely agree with that sentiment. Across SLR, we have more than 300 people, which is a large team relative to the amount of capital we manage. That’s intentional.
More than half of our employees sit in asset-based lending. We’ve been investing for over a decade in building out the verticals we talked about because having dedicated teams is critical.
In cash flow lending, for example, we’ve invested heavily in healthcare and have teams focused specifically on that sector. We also have a healthcare-focused asset-based lending team.
Specialization takes years. We’ve been active in each of these asset classes for more than a dozen years, and that track record matters.
Garwood: Economic growth has slowed and rates have been elevated, though they’ve started to come down. How are borrowers behaving differently today, and what signals are you watching most closely when underwriting?
Soiefer: Higher interest rates have increased interest expense, so we’re paying close attention to interest coverage and liquidity. We want to make sure businesses are positioned to succeed over the next couple of years.
All of our transactions are highly structured and covenant-heavy. That’s important because it brings us to the table early if a company starts to have issues, well before there’s a risk of impairment.
Culturally, we always invest as if we’re late in the economic cycle. That’s part of our DNA, and we think it’s the right mindset right now.
Garwood: Portfolio management has become much more hands-on. How is SLR approaching monitoring, engagement and problem solving across your borrower base?
Soiefer: This is another area where that complexity premium shows up. Monitoring portfolios is critical.
In lender finance, we’re financing companies that already have portfolios on day one, and those portfolios change over time as assets pay down and new ones are added. We have dedicated teams tracking those changes and often use third-party field examiners for ongoing reviews.
In asset-based lending, the work can be weekly, monthly or even daily. We’re constantly reviewing borrowing bases, receivables, verification work and cash reconciliation. That’s why so many people at SLR are focused on these strategies.
Garwood: With higher costs of capital, how are deal structures, leverage and covenants being affected?
Soiefer: Borrowers are more focused on sustainable leverage. They’re looking closely at debt service coverage and free cash flow under different capital structures.
We’re seeing companies want to ensure they can live comfortably with their leverage levels. Rates are starting to come down, so we’ll see how things evolve, but that focus on durability is very clear right now.
Garwood: Private credit has been gaining share for years. Do you expect that growth to continue in 2026, or will it slow?
Soiefer: In specialty finance, I do expect that growth to continue. Many of these companies are unrated and don’t have large deposit bases that banks care about, so private credit is a natural fit.
In areas like asset-based lending, lender finance and life science, we can look through to the quality of the collateral, even if the company itself isn’t investment grade. That’s something private credit lenders specialize in.
You also continue to see asset migration away from banks following events in 2023, like Signature and Silicon Valley Bank. I think that trend continues.
Garwood: Looking ahead to 2026, what themes will matter most for lenders who want to outperform rather than just participate?
Soiefer: For us, the multi-strategy approach is key. It allows us to allocate capital where opportunities are most attractive in any given year.
In 2023, cash flow lending was very dislocated, and we did a lot there. As we look toward 2026, we think specialty finance will offer better opportunities. But markets change quickly.
We want to stay flexible so that if a market dislocates, we’re ready to step in as a liquidity provider.
Garwood: Finally, what should borrowers, sponsors and co-lenders understand about SLR’s approach as we move into a more disciplined phase of the cycle?
Soiefer: We try to stick to our knitting. We focus on what we’ve been doing for nearly 20 years and stay consistent. We don’t stretch just because markets get tight.
That discipline, combined with upfront and ongoing diligence, is critical. We’re also continuing to invest in people across all our teams because we see a strong opportunity set ahead.
In many ways, it’s more of the same, but with a continued focus on specialty finance and doing the work the right way.
This interview originally appeared on the ABF Journal podcast and has been edited lightly for clarity and length.