The Operational Gap Private Credit Managers Need to Close | Carta

Harmony Harper of Carta, speaking with Adam Smallman at the PEI Private Credit New York Forum, describes where private credit's operational infrastructure is lagging the asset class. She names three pressure points: LP reporting, with investors seeking diagnostic visibility into watchlists and valuation marks; valuation discipline under tighter regulatory scrutiny; and loan-level data scattered across disconnected systems and spreadsheets. She then walks through Carta's covenant monitoring, which uses AI to extract covenants from credit agreements, test borrower financials as they arrive and flag threshold breaches, with a queryable lending data model for GPs, LPs and auditors.

1. Harper identifies LP reporting, valuation discipline and fragmented loan-level data as the three operational pressure points in private credit.
2. She says LPs are asking for diagnostic visibility into watchlists and valuation marks.
3. Regulatory scrutiny of how valuation marks are set is described as intensifying.
4. Carta's covenant monitoring extracts covenants from credit agreements, tests borrower financials against them and creates a task when a threshold is breached, with data queryable by GPs, LPs and auditors.