With U.S. public debt above US$40t, long term yields over 5% on the 30 year and no strong policy stimulus in sight, funding costs are becoming a story investors can no longer ignore. Higher discount rates can reshape which stocks benefit from this capital hungry cycle and which struggle. This article walks through three stocks from the private credit and direct lending screener that look particularly exposed to these forces.

The three stocks below are just a starting sample, and the full screen surfaced 15 more companies with equally detailed and potentially interesting narratives that are not covered here. If you want to go deeper into this corner of listed private credit, head straight to the Publicly Listed Private Credit and Direct-Lending Firms screener to identify, compare, and analyze the highest conviction ideas.

TPG (TPG)

Overview: TPG is a large alternative asset manager that runs private equity, credit and other investment strategies for institutions and wealth clients, with a meaningful focus on private credit and bespoke direct lending that fits squarely with this screener’s theme. The company structures and arranges debt and equity deals, provides advisory and placement services, and also invests its own capital across private funds and credit vehicles.

Operations: TPG reports US$4.6b in revenue from its Brokerage segment, which reflects its core activity of arranging, advising on and managing capital across its platforms.

Market Cap: US$20.1b

TPG gives you exposure to one of the larger listed platforms in private credit and direct lending. Higher long term rates and tighter bank lending are pushing more borrowers toward non bank capital. Management is responding with a pivot toward private and bespoke credit opportunities, and a sizeable pipeline in complex financings and rescue situations. At the same time, TPG carries valuation expectations that assume strong earnings improvement and faces known pressure points such as fundraising cycles, funding costs and execution risk as it expands newer channels like wealth and insurance. If you are weighing whether that private credit opportunity set justifies those expectations, TPG is a stock worth a closer look.

TPG’s private credit pivot could be masking an even bigger story about how its US$4.6b Brokerage engine and valuation expectations really fit together, and the hidden pressure points inside the 2 key rewards and 1 important warning sign

Blue Owl Capital (OWL)

Overview: Blue Owl Capital is an alternative asset manager built around private credit and direct lending, offering financing to middle market companies, large investment firms, and real estate owners through permanent capital vehicles and long dated private funds. Its platform spans diversified and technology focused loans, investment grade and liquid credit, GP stakes and debt, and net lease real estate. This keeps it closely tied to institutional demand for private corporate loans that this screener is designed to surface.

Operations: Blue Owl Capital generates all of its reported US$3.0b in revenue from asset management services to clients in the United States.

Market Cap: US$18.2b

Blue Owl Capital is often viewed as a relatively pure way to gain exposure to private credit and direct lending, with a permanent capital model aimed at collecting management and performance fees rather than taking all the lending risk on its own balance sheet. Higher long term rates, heavier government borrowing and intense capital demand in areas such as AI and infrastructure can make private loans more expensive and complex. This can increase fee opportunities but can also put pressure on borrowers and credit quality. The combination of a high P/E, meaningful debt, a recent US$364m one off loss and a near 8% dividend yield with thin coverage highlights the gap between the investment theme and the underlying risks, which may warrant closer scrutiny.

Blue Owl Capital’s permanent capital engine and high P/E are pulling in attention. However, the mix of meaningful debt, a recent US$364m loss and that near 8% yield raises tougher questions. Get the fuller story inside the 2 key rewards and 3 important warning signs (1 is major!)

Trinity Capital (TRIN)

Overview: Trinity Capital is a business development company that provides term loans and equipment financing to growth stage private companies, giving listed investors direct exposure to the private credit and direct lending market. It focuses on venture backed borrowers across sectors such as software, life sciences and clean technology, and also makes select private equity related investments.

Operations: Trinity Capital reports US$313 million in revenue from its Venture Capital segment, all generated in the United States.

Market Cap: US$1.7b

Trinity Capital provides a way to tap higher spreads in private credit as venture backed companies look for non bank funding that avoids heavy equity dilution. The company sits in a busy corner of specialty finance, with record U.S. venture capital dry powder, a large pipeline of unfunded commitments and management highlighting the role of non bank lenders as traditional banks pull back. At the same time, investors need to weigh funding costs, dividend coverage, past shareholder dilution and the risk that a weaker startup cycle or higher for longer rates could test credit quality. For those interested in how that risk reward trade off looks beneath the headline yield, Trinity Capital may warrant closer attention.

Trinity Capital’s high yield and venture focused portfolio can look like a simple income story, yet the real swing factor sits inside the 4 key rewards and 4 important warning signs (4 are major!)

Seeking Fresh Alternatives Before Others?

Fresh ideas can move fast. Breakout themes gain momentum, quiet laggards get caught flying under the radar for now, and opportunities start dropping from view before the crowd notices.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.