What LP Conversations in Private Credit Taught Me
When I first started telling people that Stratus Financial Fund lends to commercial pilot students, I braced for the confused look. Aviation training? Like… flight school? Yes. Exactly like flight school.
What I didn’t expect was how quickly that confusion turned into curiosity, and how often that curiosity became the most honest conversation I’d have with a prospective LP all year. Something about the unexpectedness of the answer seemed to shake people out of their usual due diligence script. They stopped asking the prepared questions and started asking real ones.
That pattern taught me something I now consider the single most important lesson in private credit investor relations: the story behind what you lend into matters far more than the yield you put at the top of your deck. Because yield, in today’s market, is everywhere. Trust, real and earned and structural, is not.
The Crowded Room Nobody’s Talking About
Private credit has had an extraordinary run. Assets under management in the space have grown from roughly $500 billion a decade ago to well over $2 trillion today, and the flood of capital shows no signs of slowing. For allocators, whether family offices, RIAs, or high-net-worth individuals, the pitch sounds almost too clean: floating rate returns, low correlation to public markets, senior secured positions, and current income in a world where fixed income disappointed for years.
All of that is real. But here’s what I started noticing in my LP conversations about two years into this role: the questions got harder. And rightfully so.
The allocators I speak with are no longer asking just “what’s the yield?” They’re asking who else is in this part of the market, and what that crowding does to spreads over time. They’re asking what happens to borrowers if rates stay elevated for another 18 months. They’re asking how I know, concretely, that we actually understand the assets we’re underwriting, and not just that we have a compelling thesis about why the sector is attractive.
These are exactly the right questions. And they’ve exposed something important about where private credit as an industry has a real problem. A lot of funds that rushed into the space over the last few years are offering similar-looking products with very different levels of actual sector knowledge underneath them. The marketing materials converge. The track records are short. And the differentiators are often more about distribution infrastructure than genuine credit expertise.
When capital flows this quickly into a category, it pays to be skeptical. The allocators who are thriving in private credit right now are the ones who learned to look past the headline return and ask harder questions about the manager sitting across from them.
What Aviation Training Lending Actually Taught Us About Underwriting
When Stratus identified aviation training finance as a core focus, it wasn’t a marketing decision. It was an underwriting one.
Commercial pilot pipelines have a structural supply problem that isn’t going away anytime soon. Airlines globally are projected to need hundreds of thousands of new pilots over the next two decades, and the training infrastructure, including flight schools, simulator programs, and accelerated certification tracks, is chronically underfunded by traditional lenders. Banks don’t know how to underwrite it. It doesn’t fit their box. The collateral is non-standard, the borrowers are pre-income, and the credit decision requires genuine understanding of licensing pathways, employment placement rates, and aviation labor market dynamics that most credit committees simply don’t have.
That’s precisely why the opportunity exists. And it’s precisely why we spent serious time building the expertise to do it well before we deployed a dollar of investor capital.
What this niche taught us, and what I now use as the backbone of every LP conversation, is that genuine sector knowledge is the real risk mitigant. Not just the seniority of the lien. Not just the loan-to-value ratio. The actual understanding of what you own and why the borrower will pay you back. These are different things, and conflating them is one of the most common mistakes new entrants to specialty credit make.
When we present the opportunity to a family office, walking them through the FAA certification process, the airline hiring pipelines, the employment rate for graduates from the programs we finance, and how we structure around downside scenarios in a weaker hiring environment, that’s a fundamentally different conversation than showing them a spreadsheet. It’s a conversation that builds conviction because it demonstrates that we’ve done work that isn’t replicable by a generalist. That’s where the real moat is in private credit, not in scale, not in brand, but in knowledge that takes years to develop and can’t be shortcut.
The other thing this focus taught me, unexpectedly, is how much borrowers care about their lender’s understanding of their world. The flight schools and training programs we work with are not just looking for capital. They’ve often been turned down by banks that didn’t understand what they were looking at. When Stratus shows up speaking their language, knowing the regulatory landscape, understanding the student completion and placement data, it changes the dynamic entirely. We become a partner in the business rather than just a line item on their balance sheet. That matters for credit performance, and it matters for deal sourcing.
The LP Relationship Is Longer Than the Fund
One of the things that takes managers to admit is this: the capital raise is not the finish line. It’s the beginning of a relationship that, if done right, outlasts any single fund vintage.
The family offices and RIAs I work with are thinking generationally. They are not moving money in and out of private credit vehicles on a quarterly basis. When they commit to Stratus, they are making a judgment about the people as much as the strategy. They’re asking themselves whether they trust this team to make good decisions when things get complicated, to communicate clearly when the news isn’t good, and to prioritize their interests over the GP’s convenience.
That shapes every touchpoint: from the first call to the monthly webinar, the newsletter that lands in their inbox, and the check-in call that happens not because the calendar said so, but because something in the market warranted a conversation. We don’t wait for a formal moment to communicate; we create them.
Our approach at Stratus has always been boutique by design, not boutique by default. We are not trying to be all things to all LPs. We are deeply focused, deliberately careful about LP count relative to capital managed, and relentlessly communicative. When something in our portfolio changes, our LPs hear it from us before they read it anywhere else. That’s not a compliance posture. It’s a relationship posture, and there’s a meaningful difference between the two.
In a market where the largest private credit platforms are managing hundreds of billions across dozens of strategies, there is a real and growing appetite, particularly among family offices, for a manager who picks up the phone. Who remembers that this particular LP has a concentration concern in financial services assets, or that another has a strong preference for quarterly cash distributions over rolled returns, or that a third is building toward a liquidity event in three years and needs to think carefully about duration. These feel like small things. But they’re the things that make someone feel like a partner rather than a line on a cap table, and in this business, that feeling has compounding value.
I’ve also found that the boutique relationship model forces a kind of discipline on the GP side that larger platforms can inadvertently lose. When you have a small, deliberate LP base, you cannot hide behind complexity. You can’t send a 40-page quarterly report full of charts and call it communication. You have to actually explain what happened, what you think it means, and what you’re doing about it. That accountability, uncomfortable as it occasionally is, makes you a better manager.
What I’d Tell Every LP Walking Into Private Credit Today
The opportunity in private credit is real. The structural case, built on banks retrenching from middle-market and specialty lending, the persistent demand for income in diversified portfolios, and the floating rate protection in an uncertain rate environment, remains intact.
But the variance in manager quality is also real, and it is considerably wider than the marketing materials suggest. Here is what I’d encourage any allocator to probe, regardless of which manager they’re evaluating.
Understand the niche, not just the strategy. “Private credit” is not an asset class. It’s an umbrella covering everything from large-cap direct lending to esoteric specialty finance. What matters is whether your manager has genuine, demonstrable expertise in the specific sectors they lend into. Ask them to explain the underwriting logic in plain terms. Ask them what could go wrong in their specific book, and whether their answer sounds like it came from someone who has spent years in that market or someone who read a good research note about it.
Ask about the bad deals, not just the good ones. Every manager will walk you through the wins. Ask them to describe a credit that didn’t perform as expected. What happened, how did they manage it, and what did they change afterward? The quality of that answer tells you more about underwriting discipline and organizational learning than any track record table. A manager who has never had a difficult credit either hasn’t been doing this long enough or isn’t being honest with you.
Treat communication as a signal, not a courtesy. How a manager communicates with you before you invest is a reliable preview of how they will communicate with you after. If the pre-investment interactions are polished but thin on substance, that pattern tends to hold. If your calls get rescheduled more than they happen, that tells you something about how the team prioritizes LP relationships relative to everything else competing for their attention.
Match the vehicle to your liquidity reality. Private credit is illiquid. Not somewhat illiquid; genuinely illiquid for the duration of the commitment. That’s fine, and the illiquidity premium is often exactly where the return advantage lives. But it requires honest self-assessment before you commit. The allocators who end up regretting private credit decisions almost always made them without fully internalizing what that illiquidity would feel like in a year where their needs or market conditions changed unexpectedly. Have that conversation with yourself, and with your manager, before the subscription documents are signed.
Pay attention to how the team talks about their borrowers. This one sounds soft, but it matters. A manager who sees their borrowers purely as credit exposures to be monitored thinks differently about the business than one who understands that borrower success and portfolio performance are the same thing. The best private credit managers we’ve seen, across the industry, treat the lender-borrower relationship as a long-term dynamic worth investing in, not just a contract to be enforced.
The Skyward View
I started this piece thinking about those early confused looks I used to get when I mentioned aviation training finance in an LP meeting. I get fewer of them now, partly because the structural opportunity in commercial pilot pipelines has become better understood in the market, and partly because over four years of consistent execution builds a credibility that no pitch deck can manufacture.
But I’ve come to genuinely appreciate those early moments of confusion for what they were. They were an invitation to tell a real story rather than deliver a pitch. A story about why this corner of the credit market is structurally underserved, why understanding it deeply took real work, why Stratus is positioned to serve it in a way that a generalist credit fund cannot, and why the people behind the fund have chosen to stay focused rather than drift toward whatever the market is currently excited about.
That, ultimately, is what LP relationships in private credit come down to. Not the spread over SOFR. Not the covenant package. Not the fee structure, though all of those things matter and deserve scrutiny. It comes down to whether the people managing your capital understand what they’re doing, tell you the truth about it, and treat your relationship as something worth protecting over the long term.
The funds that will matter in this space a decade from now are not necessarily the ones with the most assets today. They’re the ones whose LPs never had to wonder where they stood.
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Eljona Shkreli is the Head of Investor Relations at Stratus Financial Fund, a private credit manager specializing in aviation training finance. The views expressed here are of her own views and experience.
About Stratus Financial
Stratus Financial provides tailored lending solutions to aspiring aviators, ensuring that the dream of flight remains within reach for students across the nation. Founded by pilots and financial experts, Stratus combines industry knowledge with flexible financing options to help students achieve their goals. Through strategic partnerships and an unwavering commitment to customer service, Stratus is helping shape the next generation of pilots. Learn more at www.stratus.finance.
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