economy
February 24, 2026
From Jamie Dimon’s ‘cockroaches’ to the Blue Owl freeze: How stress is spreading in private credit
Private credit's meteoric rise to a roughly $3 trillion cornerstone of global finance was fueled by demand for lending outside the traditional banking system.
TL;DR
- Private credit, a $3 trillion sector, faces significant stress from recent bankruptcies, fraud charges, and redemption freezes.
- Tricolor and First Brands, both heavily leveraged, filed for bankruptcy in September 2025, leading to fraud indictments against their executives.
- Concerns are rising about private credit's exposure to the enterprise software sector, which may be disrupted by AI.
- Blue Owl Capital permanently halted redemptions for its $1.6 billion OBDC II fund, highlighting liquidity issues.
- Activist hedge funds are offering to buy shares in Blue Owl funds to provide liquidity to retail investors.
- Despite the stress, global private credit fundraising increased in 2025, though at a slower growth rate.
- The current situation serves as a learning experience for the industry, potentially leading to better liquidity management.
Continue reading the original article