Private credit’s ‘zero-loss fantasy’ is coming to an end as defaults and fund exits rise

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Deteriorating asset quality, collateral markdowns and a growing rush for the exits are rattling private credit markets and prompting comparisons to the Global Financial Crisis.

But a spike in loan defaults, while painful, could help shake out pockets of stress from the $3 trillion sector and provide what one industry pro calls a “healthy reset” after its first major liquidity test.

Ares Management

on Tuesday opted to curb investor withdrawals from its $10.7 billion private credit fund, just a day after Apollo Global Management