News•Mar 13, 2026
The Blue Owl in The Coal Mine – Private Credit: The New Subprime?
Blue Owl, a $300 bn private‑credit manager, froze withdrawals from a retail fund and sold $1.4 bn of loans in February 2026, sending its shares down nearly 60% in a year. The episode highlights rapid growth of private credit to $3 tn, driven by regulatory arbitrage and massive COVID‑era liquidity that pushed investors into illiquid, low‑rate loans. Rising default rates—now around 5‑6%—and heavy AI infrastructure financing, despite weak productivity gains, signal mounting stress. A potential downgrade of private‑credit funds could force pension funds and insurers to sell, risking a cascade similar to the 2008 subprime crisis.
