Private‑credit pullback grows

Investors are pulling back from parts of private credit, and lenders are turning to the bond market to replace money that is getting harder to keep. (bloomberg.com) Blue Owl Capital’s Blue Owl Capital Corporation raised $400 million from bond investors on Monday, April 13, in the first deal of its kind in more than a month. The borrower is a publicly traded business development company that lends mostly to United States middle-market companies. (bloomberg.com) (blueowlcapitalcorporation.com) Private credit is money that investment firms lend directly to companies instead of routing the loan through a bank or the public bond market. The market has grown to about $1.8 trillion, but Bloomberg reported that funds run by Apollo Global Management, BlackRock and Ares Management have recently faced unusually heavy redemption requests. (bloomberg.com) The pressure has shown up in new money coming in. Bloomberg reported that open-ended private-credit funds took in about $1.1 billion in the first two months of 2026, down from $1.8 billion in the same period a year earlier, citing Morningstar Direct data. (bloomberg.com) A big source of anxiety is software lending. Bloomberg said worries about artificial-intelligence disruption to software companies, alongside looser underwriting and recent defaults, have shaken confidence in a corner of the market that had been one of private credit’s busiest hunting grounds. (bloomberg.com) (money.usnews.com) Higher rates have added another strain because many direct loans carry floating interest costs that rise with benchmark rates. Bloomberg reported that business development company bond spreads widened to about 2.25 percentage points above benchmarks in recent weeks, from 1.7 percentage points in January. (bloomberg.com) Managers have responded by slowing withdrawals, selling assets and looking for fresh financing. Blue Owl said in February that certain of its business development companies agreed to sell $1.4 billion of direct-lending investments to pension and insurance investors at 99.7% of par value. (blueowl.com) Not every executive is treating the retreat as a collapse. Goldman Sachs Chief Executive David Solomon said on April 13 that retail concern around private credit could persist, but Bloomberg reported that Goldman still sees the asset class as attractive and has “few issues” in the space. (bloomberg.com) For now, the clearest signal is that private-credit firms are working harder to secure cash. A $400 million Blue Owl bond sale would have looked routine a year ago; in April 2026, it reads as a test of how much confidence is left. (bloomberg.com)