How much are they leaning on public bond markets or indeed the rest of the debt system. So the best way to think about this is they are tapping all done markets. So we have obviously the typical on balance sheet corporate borrowing, which you see like with the Oracle deal today.That can be an investment grade bond, a high yield bond or a leveraged loan or even a private credit direct loan. But there's a lot of off balance sheet borrowing happening as well. I know that sounds a little bit scary when you firs ...

Private credit could see default rates surge to as high as 13% in the US if artificial intelligence triggers an “aggressive” disruption among corporate borrowers, according to UBS https://t.co/3YiAZMMYid ...

The US private credit market is projected to grow from 3 trillion at the start of 2025 to nearly 5 trillion by 2029. Private credit is lending by non-bank financial institutions to businesses that take place outside of the public markets. >> There are so many advantages to private credit.There's the speed, the flexibility, the reaching companies that haven't really been reached before. >> Private credit typically provides loans to companies that are otherwise unable to obtain them through banks or public de ...

The Exit Rush Is Over for Nontraded BDCs. Cash Keeps Coming Into Private Credit. - Barron'sSkip to Main ContentThis copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.# The Exit Rush Is Over for Nontraded BDCs. Cash Keeps Coming Into Private Credit.By [Bill Alpert]ShareResize---R ...

Core Insights - Private lending has gained significant attention in recent years, particularly in the post-pandemic era, where it has emerged as a prominent source of capital [1] Industry Overview - The private credit market has become a focal point for investors seeking alternative financing options as traditional lending sources have become more constrained [1]

A loss by BlackRock (BLK) has reignited concerns about what might be hiding in private credit. Our 24/7 Wall St. Analysts discuss what is taking place with the world's largest asset manager, and whether or not these worries are warranted. ...

Core Insights - The article discusses the appeal of private credit for advisors in a low-yield environment, highlighting the potential for yield premiums over traditional investment-grade or high-yield corporates. The Simplify Private Credit Strategy ETF (PCR) is presented as a vehicle to capture these benefits while managing liquidity and volatility concerns [1]. Group 1: Key Considerations for Advisors - **Liquidity Management**: The ETF structure provides daily liquidity, but the underlying private credit assets are less liquid. PCR uses total return swaps (TRS) to track an index of publicly traded business development companies (BDCs) and closed-end funds (CEFs), which helps eliminate reporting of acquired fund fees and expenses (AFFE) [1]. - **Volatility Management**: Private credit's perceived stability can be misleading due to infrequent price discovery, leading to sharp drawdowns in market stress. PCR's underlying index, the VettaFi Private Credit Index, has realized volatility over twice that of high-yield bonds. PCR employs a proprietary quality-minus-junk credit hedge to mitigate severe drawdowns [1]. - **Diversification of Manager Risk**: The performance disparity among private credit managers can be significant. PCR offers diversified exposure across a 52-constituent index, allowing advisors to focus on asset allocation without the need for individual manager due diligence [1]. Group 2: Pure Private Credit Exposure - **Unadulterated Exposure**: Many competitors face SEC's 15% limit on illiquid holdings, resulting in diluted private credit exposure. PCR circumvents these caps to provide pure exposure, ensuring clients receive 100% of the intended asset class [1]. - **Direct Investment Strategy**: Unlike many private credit ETFs that manage marginal exposure due to regulatory constraints, PCR aims to deliver exclusive holdings in private credit investments, enhancing the purity of exposure [1].

A $140 million loss at BlackRock is reviving questions about the accuracy of financial disclosures to individual investors in the booming private-credit industry https://t.co/m8xNjN9oR9 ...

Core Insights - Investors withdrew approximately 15.4% of net assets from Blue Owl Capital Inc.'s tech-focused fund, Blue Owl Technology Income Corp., after the fund increased withdrawal limits to about $527 million from a previous cap of 5% [1][2] Group 1: Fund Performance and Investor Behavior - The significant redemption activity indicates growing unease in the private credit market, which is facing challenges such as high-profile losses and increased regulatory scrutiny [2] - The BDC industry experienced a notable rise in tender activity during the fourth quarter of 2025, a trend associated with market volatility [3] - A portion of the redemptions originated from wealthy individuals in Asia, who represent a substantial part of the fund's investor base [3] Group 2: Fund Management and Financial Health - Blue Owl has honored all tender requests for the fund, increasing the available amount to maintain investor satisfaction, while asserting that performance remains strong [4] - Following the redemptions, the fund's net leverage rose to 1.05 times debt-to-equity, with approximately $1.4 billion in liquidity available post-redemptions [4] - The 17% redemption request is the largest percentage withdrawal the asset manager has ever experienced, raising concerns about the sustainability of net inflows if redemptions persist above 5% [5][6] Group 3: Historical Performance - In the previous year, OTIC's Class I shares achieved a 9% return, leading to an annualized inception-to-date return of 10.8% [6] - Redemptions for Blue Owl's largest direct lending vehicle, Blue Owl Credit Income Corp., reached 5.2%, totaling around $1 billion [6]

Financial Data and Key Metrics Changes - Blackstone reported GAAP net income for Q4 of $2 billion, with distributable earnings of $2.2 billion or $1.75 per common share, and declared a dividend of $1.49 per share [3][4] - For the full year, distributable earnings increased 20% to $7.1 billion, while fee-related earnings rose 9% to $5.7 billion, and management fees grew 12% to $8 billion [31][27] - Assets under management (AUM) increased 13% year-over-year to approximately $1.3 trillion, marking a new industry record [5][31] Business Line Data and Key Metrics Changes - The infrastructure platform grew 40% year-over-year to $77 billion, with over $4 billion raised in Q4 [16] - BXMA reported a gross return of 13% for 2025, with net inflows of $6.3 billion, the highest in nearly 15 years [17] - In credit, total assets managed reached $520 billion, up 15% year-over-year, with inflows exceeding $140 billion in 2025 [19] Market Data and Key Metrics Changes - Private wealth fundraising increased 53% year-over-year to $43 billion, contributing to a total AUM growth of 16% in this segment [4][22] - The insurance channel's AUM grew 18% year-over-year to $271 billion, with significant demand for private credit solutions [20][21] - The individual investor channel's AUM tripled over the past five years, exceeding $300 billion [22] Company Strategy and Development Direction - Blackstone is focusing on thematic areas such as digital infrastructure, private credit, and life sciences, with a strong emphasis on AI-driven investment opportunities [8][10] - The firm is well-positioned to benefit from the ongoing AI and power investment mega cycle, with nearly $200 billion of dry powder available for future investments [12][10] - The company anticipates a resurgence in capital markets activity, with IPO and M&A activities accelerating [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the firm's ability to navigate geopolitical uncertainties and a complex operating environment, citing strong operating fundamentals [7][12] - The outlook for 2026 is optimistic, with expectations for continued growth in management fees and net realizations, driven by a favorable investment environment [35][36] - Management highlighted the importance of investment performance, with strong returns across various funds, particularly in infrastructure and corporate private equity [31][33] Other Important Information - Blackstone's fundraising success has led to a significant increase in AUM, with a record level of inflows in Q4 [4][5] - The firm has executed multiple privatizations and investments, including a notable $18 billion acquisition in the medical technology sector [8][9] - The company is actively innovating in the private wealth market, expecting 2026 to be a busy year for product launches [24] Q&A Session Summary Question: What sectors and industries will you be leaning into for the record IPO pipeline? - The focus will be primarily on the corporate space, particularly energy and electricity sectors, with expectations for increased activity in India and some real estate opportunities [38] Question: How is AI being deployed across portfolio companies? - AI is enhancing productivity in software engineering and customer engagement, with early positive impacts observed in various operational areas [41] Question: What is the outlook for direct lending in both wealth and institutional markets? - Institutional confidence remains strong, while the wealth side has seen some redemptions; however, performance metrics are healthy, and inflows have been positive recently [46][48] Question: How does the firm plan to maintain growth and preserve culture as it scales? - The firm emphasizes a strong commitment to delivering for customers and maintaining a performance-driven culture, which is crucial as it continues to grow [62]