What’s going on with Private Credit these days?

MKT Research
Apr 4
4 min read

This note examines the recent underperformance of private credit assets and funds. By tracking public representation of private assets, we determine that while the underperformance reflects pessimistic views on fundamental value, especially for technology assets, at least part of the underperformance manifests a liquidity preference.

Abstract

Discussion of private credit has been front and center during Q1/2026. Much attention has been drawn to BDCs and private-credit funds, and the assets they hold. One question on people’s minds is whether the turmoil in the private credit market manifests a deeper, systemic crisis—-a difficult question given the non-marketability of the assets in question. To overcome this difficulty, we study public representations of private assets. In contrast to recently proposed solutions, mostly based top-down matching of private assets based on observable characteristics, such as size, leverage, and industry classifications, we offer a different, bottom-up approach based on the textual representation of a private company’s thematic business activity, which is used to match with thematically similar public companies. The technology is based on MKT MediaStats’ lab environment, utilizing vast data of media coverage, corporate filings, web pages, firm’s Wikipedia, etc.—-point in time. Comparing the returns of publicly traded BDCs to the returns of the public representation of their private holdings suggests that the holdings are more valuable than the vehicles that hold them.

This implies that the recent underperformance of private credit is not entirely driven by poor fundamentals, but also points to a substantial investor liquidity preference.

The private credit narrative

Instead of relying on ad-hoc conversations with a relatively small circle of colleagues or a limited set of media sources, we first quantify the amount of attention to the private-credit narrative using MediaStats’ information reservoirs curated from hundreds of thousands of digital media sources (roughly one million articles per day). For the analysis, we focus on a subset of media articles, the private asset reservoir, which aggregates content from specialized private asset sources such as Private Equity International, Private Equity Wire, PE Professional, and PE-Insights. The charts below display the time series of attention to private credit, intensity (left) and sentiment (right). Attention to private credit has grown steadily over the past decade and recently reached all-time highs, that is, roughly one-third of private-assets–related articles now cover private credit, roughly twice the share observed just a few years ago.

While the coverage of private credit has been generally positive (adjusted for the average sentiment within the private assets reservoir), it has declined sharply in recent weeks, consistent with emerging concerns around stress in the private credit segment.

Figure 1: The Private Credit Narrative

Public representation of private assets—methodology

In contrast to recently proposed solutions, mostly based top-down matching of private assets based on observable characteristics, such as size, leverage, and industry classifications, our analytical framework offers a different approach based on the individual private assets held by an investment vehicle. This bottom-up approach is based on the textual representation of a private company’s thematic business activity, which is used to match it with thematically similar public companies. The technology is based on MKT MediaStats’ lab environment, utilizing vast company-specific data including media coverage, corporate filings, company web pages, firm’s Wikipedia, etc.—-point in time.

This analysis focuses on four private credit vehicles as listed in Table 1. We use public sources to identify the individual private asset each of them holds and remove non-operational holdings including other investment vehicles, and feeder funds. The final list of holdings includes operational companies.

Table 1: Private Investment Vehicles Used In this Study

Vehicle Name	Manager	Structure	Net Assets ($B)	Number of Loans
ODBC II	Blue Owl	BDC	1.4	200
North Haven	Morgan Stanley	Private BDC	1.3	200
Cliffwater	Cliffwater	Interval Fund	33.1	4,000
Blue Owl Tech	Blue Owl	BDC	8.0	200

The operational companies held by each private credit vehicle are sorted by loan value. The MKT MediaStats Lab process fetches the business descriptions of the private companies by crawling sources such as LinkedIn, Yahoo Finance, Wikipedia and mapping relevant pages for each private company. The company description is extracted for each private holding, which is then analyzed to identify its underlying thematic business activities. Subsequently, textual analysis is performed to identify, for each private company, the top five public companies with which it has the highest thematic similarity.

Table 2 summarizes, for each investment vehicle, the number of private assets mapped, the share of total capital represented by these mapped assets, and the number of public companies included in the mimicking portfolio.

Table 2: Private Credit Vehicles’ Holdings and Their Public Representations

Vehicle Name	# of Mapped Private Companies	Share of Capital Covered by Mapped Companies	Number of Stocks in Public Proxy
ODBC II	47	63%	211
North Haven	97	66%	328
Cliffwater	177	52%	560
Blue Owl Tech	50	56%	185

The case of a specific, traded Blue Owl BDC

The chart below displays the cumulative returns of Blue Owl BDC (OBDC) and its public representation, as well as Blue Owl stock and the MSCI US benchmark. All time series have recently underperformed, consistent with the discussed turmoil in this asset class. However, OBDC underperformed its public representation, suggesting that despite the pressure on value due to fundamentals, there is additional price pressure, perhaps due to a liquidity preference. OWL stock itself exhibits a more severe drop in price, potentially reflecting additional considerations such as leverage.

Figure 2: Returns of OBDC, its Public Representation, OWL and MSCI US

A cross-sectional analysis

Figure 3 presents the public representation of the four private credit portfolios analyzed in this study for Q1 2026 (left) and over the period from January 2025 to March 2026 (right), benchmarked against the Invesco Global Listed Private Equity ETF and the MSCI US.

The results highlight variation in underlying asset quality across the investment vehicle. While OBDC assets (represented by the thematically similar public assets) have performed well relative to OBDC, there is meaningful cross-sectional dispersion in performance across the vehicles studied here. Specifically, the public representation of the Blue Owl Technology Finance Incorporation (BO Tech) has underperformed. This suggests that to the extent that the underperformance represents a drop in fundamental value, this concerns more technology assets.

Figure 3: Returns of Public Representation of Private Credit Portfolios