Unity Investments

The Last Incremental Buyer | Valuations, Leverage & the Exhaustion of Structural Bids

Unity Investments — Mon, 20 Jul 2026 14:15:08 GMT

For the past three decades, U.S. equities have benefited from powerful structural tailwinds: retirement accounts on autopilot, record corporate buybacks, and accommodative monetary policy; however, many of these forces are beginning to weaken, just as leverage reaches historic highs and net equity issuance turns positive. In our latest white paper, we explore a simple question: Who is the last incremental buyer and what happens when that source of demand begins to fade?

The Liquidity Illusion | AI, Software, and the New Selectivity in Private Credit

Unity Investments — Wed, 20 May 2026 07:08:27 GMT

Private credit’s shift into semi-liquid structures exposed a fundamental mismatch between investor liquidity expectations and the inherently illiquid nature of private loans. That tension surfaced as funds faced roughly US$20 billion in redemption requests, forcing managers to rely on gates, caps, and deferrals to manage outflows.

In this paper, we examine the mechanics of fund gating, the mounting pressure surrounding software lending, and the broader implications of a market entering a more selective era for private credit.

Silicon, Steel & Stress | Part II: Deferred, Not Defused

Unity Investments — Thu, 02 Apr 2026 05:49:50 GMT

The unprecedented expansion of AI infrastructure, as detailed in Part I, has created a US$1.5 trillion external financing gap that is increasingly being filled by private credit. Part II shifts from quantifying the scale of capital requirement to stress-testing the structural durability of the debt facilities supporting it.

The central finding of Part II is that the current lending environment is defined by a profound duration mismatch between the underlying physical assets and the capital stacks they secure. While data center infrastructure has historically been underwritten as a long-term real estate play, the rapid innovation cycle of the GPU has introduced an aggressive rate of economic obsolescence that is fundamentally at odds with traditional longer-term credit tenors. The immediate risk to lenders is not collateral erosion—structural scarcity and packaging bottlenecks have kept secondary market values surprisingly resilient—but cash-flow compression. As new generations reset compute economics, rental rates have already fallen 64–75% from peak, leaving older fleets struggling to service debt even as their collateral holds. This divergence between cash flow and collateral value is the core tension.

Compounding this technological risk is the widening physical bottleneck in the electrical grid. The five-to-seven-year timelines required for high-voltage power interconnection forces credit used to finance the data center buildout to wait for the repayment cashflow, creating additional strain in an already levered capital stack. Moreover, the systemic nature of this buildout has resulted in an extraordinary concentration of risk across a narrow set of lenders and hyperscaler tenants. Ironically, the lenders are financing the AI buildout that is directly eroding the competitiveness of their primary sector exposure: software. At the same time, the tenants hold tremendous bargaining power over the lenders given their size and scale.

While the market has avoided a wave of defaults thus far due to (i) structural supply scarcity and (ii) the relative youth of these loan tenors, the upcoming 2026–2029 refinancing window represents a critical maturity wall. The question is whether these buffers will hold long enough for the broader system to absorb the stress or deteriorating coverage ratios will finally translate into realized losses. Ultimately, the sustainability of this credit ecosystem depends more on the continued willingness of systemic stakeholders to provide the liquidity necessary to refinance outstanding obligations.

Stablecoins: Rewriting the U.S. Credit Playbook

Unity Investments — Tue, 31 Mar 2026 04:14:19 GMT

Stablecoins enable the settlement of payments on a global scale in a fast and secure manner. The industry as a whole has issued US$250 billion worth of coins and is now the 18th-largest external holder of U.S. Treasuries.[2] In this white paper, we assess 1) the accelerating adoption of stablecoins, and 2) what it means for U.S. Treasuries, the yield curve, and the broader credit ecosystem.

What are stablecoins?

Stablecoins, such as Tether and USDC, are tokenized cash issued by institutions on public blockchains. They promise stable value relative to fiat currencies through support from verified reserves. Following the passage of the GENIUS Act, which we will discuss throughout this paper, U.S. issuers are required to maintain one-to-one reserves in highly liquid assets, such as cash or U.S. Treasuries, thereby pegging one coin to one U.S. dollar.

Why do stablecoins exist?

Unlike traditional payment infrastructure, digital currency enables immediate transactions with minimal costs. Additionally, there is greater transparency in the number of intermediaries, 24/7 operating hours, and automated compliance processes. Above all, stablecoins are now asset-backed by highly liquid and redeemable collateral, mostly in the form of short-term Treasury Bills and cash. The current iteration of asset-backed stablecoins differs from the previous algorithmic, mint-burn stablecoins, such as TerraUSD, which we explain below. As they stand today, stablecoins simply provide global access to the digital Dollar, making them a trustworthy alternative to volatile currencies, especially in developing regions with limited banking infrastructure.

Private Credit Primer | Part 1: Origin, Strategies, Players, and Bubbles

Unity Investments — Tue, 31 Mar 2026 04:06:05 GMT

Investors often ask us: “What is private credit?” While the term “private credit” is used ubiquitously, we realized that most investors have only a broad, hazy understanding of what private credit is. Many also assume uniformity across all private credit strategies.

In reality, private credit is a ~US$2 trillion global market, which has wide variations in loan structures, durations, collateral quality, and risk profiles. Below is our first white paper on private credit.

S&P 500 CAPE Ratio Analysis | Current Signals & Historical Patterns

Unity Investments — Wed, 25 Mar 2026 07:23:57 GMT

On September 23, 2025, during a speech in Providence, Rhode Island, Federal Reserve (“Fed”) Chairman Jerome Powell was asked about the Fed's view of financial market pricing. He replied, "By many measures, for example, equity prices are fairly highly valued." A few questions jumped out to us immediately after Powell’s speech: What did Chairman Powell mean by “fairly highly valued?” Where does the current market valuation sit within S&P’s historical valuation range? In this piece, we provide our analysis and insights. Does overvaluation lead to underperformance or negative performance over the short, medium, and long run? Does overvaluation mean that the market will collapse imminently?

Trump's 401(k) Executive Order to Unlock US$9.3 Trillion for Private Markets

Unity Investments — Wed, 25 Mar 2026 07:02:18 GMT

On August 7th, 2025, U.S. President Trump signed Executive Order 14330' (EO), which directs the U.S. Department of Labor (DOL) and the Securities and Exchange Commission (SEC) to issue guidance for employers regarding the integration of private market assets into U.S. 401(k) retirement plans. We provide a basic primer on the U.S. pension plans—namely, Defined Benefit and Defined Contribution, where 401(k)s sit—and analyze the impact that the EO will have private assets and private credit in particular.

Tricolor, First Brands, and Broadband Telecom | Recent Credit Bankruptcies and Canaries in the Coal Mine

Unity Investments — Wed, 25 Mar 2026 05:36:22 GMT

Recent bankruptcies—namely, Tricolor, First Brands, and Broadband Telecom—have ignited concerns about the state of the private credit market. In this paper, we examine the root causes behind these failures, explore the structural dynamics at play, and reaffirm why disciplined underwriting, rigorous monitoring, and substantive overcollateralization are fundamental to long-term credit performance.

Silicon, Steel & Stress | Part I: An Overview

Unity Investments — Wed, 25 Mar 2026 04:05:37 GMT

We have spent the past few months conducting in-depth analysis on a topic that is highly relevant to how we think about private credit, risk, and capital allocation. The global buildout of AI infrastructure is unfolding at unprecedented speed and scale. Trillions of dollars are being deployed into GPUs, data centers, and power generation—recasting AI from a software story into one of the largest infrastructure expansions in decades.