Private Credit Defaults Hit 5-Year High at Major Investment Funds

Key Facts

1Nonaccruing loans at funds managed by Ares, Blackstone, Blue Owl, and Golub Capital have reached their highest levels in at least five years.

2Private credit funds managed by Ares, Golub, and KKR reported increases in borrowers showing deteriorating performance on their watchlists.

3Nonaccruals at Blue Owl Capital Corp. reached 2.8% during the second quarter, the highest level in five years.

Amid a backdrop of sustained high interest rates and mounting credit pressure, significant cracks are emerging in major private credit portfolios. According to reports, nonaccruing loans at funds managed by Ares, Blackstone, Blue Owl, and Golub Capital have reached their highest levels in at least five years. This shift reflects genuine pressure on borrowers that is now manifesting as actual defaults and a deterioration in underlying asset quality.

Data indicates that private credit funds managed by Ares, Golub, and KKR reported an increase in borrowers showing deteriorating performance on their internal watchlists. Specifically, nonaccruals at Blue Owl Capital Corp. reached 2.8% during the second quarter, marking its highest level in five years. These developments occur as the asset management sector faces broader challenges regarding redemption requests and liquidity per market data.

Regarding related equity performance, Blackstone (BX) closed at $146.41 as of August 12, 2026. Investors are closely monitoring price stability at these levels in light of default reports, while watching for any upcoming economic catalysts that could impact borrowing costs, noting that the immediate calendar lacks direct private credit sector events following recent US employment data.

Sources:

zerohedge.com