In the final episode of season one, Scott Church is joined by Phil Fretwell, Managing Partner of AshGrove Capital, for a conversation about building an independent credit manager in Europe and lending into software businesses at a moment when the technology underneath them is changing fast.

Phil began his career in leveraged finance at Barclays before helping to establish the European operations of two large US asset managers. In 2019, he set up AshGrove from scratch alongside two partners, and closed the debut fund during the first year of the pandemic. He is candid about how hard that was, and why an independent firm focused on credit is something of an oxymoron: you need entrepreneurs, and you need people who think relentlessly about the downside.

The conversation works through the two pillars of the AshGrove strategy. First, deliberately operating in a less competitive segment of the market, where supply and demand dynamics allow for stronger documentation, better covenants and lower detachment points. Second, the conviction that business model is a better barometer of risk than business size, which is what drives the firm's focus on B2B software and tech services.

Phil is direct on where he thinks the consensus on AI and software is wrong, why the discount applied to solid but unspectacular software businesses looks overdone, and why the revenue opportunity from AI gets far less attention than the cost one. He also explains why AshGrove chose Copenhagen rather than the more obvious Nordic option, what a shareholder buyout says about a firm being honest with itself, and the two career lessons he keeps coming back to.

In this episode:

• Why there was a gap for an independent, founder-led lender in the European lower mid-market
• What it actually takes to raise a debut credit fund, and what COVID taught them about foundations
• Why DPI became the question in the second raise, and how a high-velocity strategy answers it
• Business model over business size, and what makes a good software borrower
• Underwriting when the tech stack could look materially different in eighteen months
• Where the market is mispricing software assets, and the revenue case for AI
• Vertical software, defined niches and why disintermediation is harder than it looks
• Culture in a firm where nobody is paid enough to make a marginal decision
• Choosing Copenhagen over Stockholm, and keeping one investment standard across offices
• Listening to your gut, and why nobody ever says they acted too early

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