Private-credit firms' hot streak ends as returns weaken and asset values fall
Updated
Updated · The Wall Street Journal · May 11
Private-credit firms' hot streak ends as returns weaken and asset values fall
9 articles · Updated · The Wall Street Journal · May 11
Apollo said direct-origination gross returns fell to 0.5% from 2.6% a year earlier, while Ares, Golub and Sixth Street cut valuations or dividends.
Blackstone and Blue Owl also reported lower returns, with executives blaming Federal Reserve rate cuts and a rise in defaults; software loans face added pressure from AI disruption fears.
Redemption worries among wealthy individuals have intensified calls for transparency, though institutional inflows remain strong and private credit still outperformed public leveraged loans in the first quarter.
As AI threatens 30% of portfolios, is the private credit market facing its first technology-driven crisis?
With redemption requests doubling official limits, are private credit funds trapping investor cash ahead of a wider collapse?