Private credit is ‘resilient’ despite trouble

Blue Owl Capital Inc’s Marc Lipschultz. — Bloomberg

NEW YORK: Blue Owl Capital Inc’s Marc Lipschultz says private credit is still a good place to invest, even as some in the industry warn of weakness and more trouble ahead.

The co-founder and co-chief executive officer of the New York-based asset management firm said he hasn’t seen an up-tick in defaults or companies having performance troubles yet, but acknowledged that the current market has developed some uncertainties.

Such uncertainty in the US$1.7 trillion private credit market was exposed recently when Vista Equity Partners-backed Pluralsight Inc shifted assets away from its direct lenders, spurring worry that the incident wasn’t just a one-off.

Direct lenders have also pitched deals in recent weeks with structures that act as a workaround to bank lending constraints.

Lipschultz said in a Bloomberg Television interview that investors need to “pick their manager wisely, understand their strategy”. — Bloomberg

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