The Compound and Friends · Monday, September 28, 2026
Erik Hirsch stated that the dispersion of performance in private credit is massive and originates from the choices made by managers, similar to how different decisions for a hotel would lead to varied outcomes. He used an analogy of managing a hotel for 100 years, where individual choices significantly impact results.
“But dispersion where? But dispersion's massive. It's also massive in private credit. It's also big by the way, dispersion in private credit has really wide dispersion. Yeah, because it comes down to choice.”
“The example I always use is, let's say that, you know, I'm speaking to an audience in a room of 100 people. I say, "Okay, we're going to buy the hotel that we're sort of in for this event." And for the next 100 years, right? Each of us is going to get a chance to be the CEO. Cart blanche, full control, do whatever you want to do with this hotel. Try to make it as good as possible. We're going to have wildly different outcomes with that.”