economy
March 5, 2026
Oaktree's Howard Marks says there's no systemic problem with private credit
Marks said any risk stems from the pace of expansion in direct lending, which has ballooned to a market now exceeding $1 trillion since inception around 2011.
TL;DR
- Howard Marks does not see a widespread systemic problem in private credit.
- The rapid expansion of private credit over the past 15 years could expose weaker lenders when markets turn.
- Direct lending has grown to over $1 trillion since around 2011.
- Sentiment towards direct lenders has soured following collapses of auto-related borrowers like Tricolor and First Brands.
- Concerns exist about loans made to software companies due to potential disruption from artificial intelligence.
- The saying 'the worst of loans are made in the best of times' applies, and the market downturn will reveal credit analysis quality.
- Investors have pulled money from Blackstone's flagship private credit fund, indicating growing caution.
- It is impossible to predict precisely when the economic cycle will turn.
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