The $2 trillion private credit industry is experiencing increased strain amid concerns about valuation, transparency, and lending standards. Recent issues at Blue Owl Capital, a major private lender, have amplified these worries. Blue Owl, which manages over $300 billion in assets, recently restricted withdrawals from a fund and sold shares of other asset managers, unsettling investors. The company provides alternative capital solutions to companies and sponsors, offering direct lending and other private credit strategies.
Adding to the unease is the collapse of UK mortgage provider Market Financial Solutions, alongside broader market anxiety. Kyle Walters from PitchBook suggests that the golden era of equity-like returns in private credit may be waning due to increased competition as the industry scales. State Street estimates the addressable market for private credit has grown to over $40 trillion, including investment-grade credit.
Moody’s has highlighted that Blue Owl’s decision to move away from traditional quarterly redemptions has sharpened investor focus on liquidity management in semi-liquid private credit vehicles, particularly with growing retail participation. They noted that retail investors tend to be less patient than institutional investors, increasing redemption pressure across the market. Shares of Blue Owl, Blackstone, Apollo Global Management, and Ares Management have all fallen this year amid this increased market skepticism.
JPMorgan Chase is closely monitoring the situation. Troy Rohrbaugh, co-CEO of JPMorgan Chase’s commercial and investment bank, stated that such concerns are expected in the current volatile environment. A recent Moody’s report indicated that U.S. banks had lent nearly $300 billion to private credit providers as of June 2025, underscoring the deepening ties between private credit funds and traditional financial institutions and potentially heightening contagion risk in a downturn.
