Now Reading: Private Credit Funds Recover From Lows Despite Troubled Loans
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Private Credit Funds Recover From Lows Despite Troubled Loans
Publicly traded private credit funds have rebounded from multi-year lows as second-quarter results showed a more stable market, Bloomberg reports. Major managers are trimming weak investments, reducing leverage and limiting loans that…
The Story in Brief
Publicly traded private credit funds have rebounded from multi-year lows as second-quarter results showed a more stable market, Bloomberg reports. Major managers are trimming weak investments, reducing leverage and limiting loans that have stopped paying interest. Some funds have also bought back shares to support their values.
The recovery is uneven. Ares Capital reported non-accrual loans of $708 million, up 15% from the previous quarter, though that was 2.4% of its portfolio at cost, below its historical average. Blackstone Secured Lending Fund’s net asset value fell to $25.53 a share. BlackRock TCP Capital plans to transfer 48% of its debt portfolio to a vehicle backed by Pantheon, reducing its net asset value by about 10.4%. Blue Owl’s non-accruals rose to 2.8%.
The Indian Opinion
The loudest claims are pulling in opposite directions: private credit is either the next financial crisis or a problem already solved. Neither fits the results. Funds have steadied prices and protected dividends, but rising non-accruals and asset sales show that stress has not vanished. Investors should watch whether troubled loans keep rising and whether funds can maintain payouts without further valuation cuts. The next quarterly figures will test this recovery.
Source: livemint.com
This story was synthesised by AI from the source linked above.
