William Cohan warns private credit evades safeguards

Private credit moved Wall Street’s danger out of sight.

On September 8, William Cohan warned on Breaking Points with Krystal and Saagar that post-2008 rules pushed risky lending away from regulated banks and toward shadow lenders. Apollo Global Management, he said, built an $850 billion private credit portfolio funded largely through insurance annuities. Cohan also placed the broader private credit market at roughly $40 trillion, a scale that makes Dodd-Frank’s bank safeguards less useful when the liabilities sit elsewhere.

"Shadow lenders like Apollo Global Management stepped in, building an $850 billion private credit portfolio funded largely through insurance annuities."

- William Cohan, Breaking Points with Krystal and Saagar

The structure depends on a mismatch: policyholders can demand cash faster than private lenders can sell loans. Cohan warned that public credit vehicles may impose severe withdrawal caps when markets turn, leaving ordinary investors unable to exit while the underlying corporate debt remains unrated, private, or difficult to price.

Four days later, the risk had moved from lending architecture to insurance balance sheets. On September 12, financial analyst Nick Nemeth told Marty Bent on TFTC: A Bitcoin Podcast that carriers held substantial private credit and commercial real estate mezzanine debt. Rising Treasury yields made older 3% annuities unattractive beside 5% Treasuries, increasing surrenders just as insurers held assets that could not be liquidated cleanly.

"You cannot slice off pieces of a baseball franchise when retirees demand their cash."

- Nick Nemeth, TFTC: A Bitcoin Podcast

Nemeth used Mark Walter’s sports empire as the concrete example. He said Walter routed policyholder capital from Delaware Life and ClearSpring through dozens of Delaware shell companies into stakes in the Los Angeles Lakers and Dodgers. A forced unwind of roughly $20 billion in affiliate paper, as reported on the show, exposed the basic problem: insurance money can finance long-lived private assets, but retirees cannot wait for a franchise sale or a private-credit workout.

The two discussions describe different layers of the same vulnerability. Cohan focused on a roughly $40 trillion private credit market and Apollo’s reported $850 billion portfolio; Nemeth focused on an estimated $20 billion affiliate unwind and the insurance liabilities behind it. Those figures measure different pools, not a single loss, but they point to the same regulatory gap: banks face capital and liquidity rules, while insurers and private funds can carry similar risks under different labels.

Insurance policyholders also lack Federal Deposit Insurance Corporation protection, according to Nemeth’s account. Artificial intelligence tools may accelerate the pressure by letting customers calculate surrender penalties and compare annuity returns instantly, removing the inertia that once kept policyholders in unfavorable contracts. Whether regulators can force orderly sales before withdrawals overwhelm insurers remains unknown.

The broader danger is a liquidity run without a conventional bank. Private credit can hide losses until borrowers weaken, while insurance can hide the funding strain until policyholders leave. The shows’ shared warning is specific: safeguards built after 2008 do not cover every institution now performing bank-like work.