Blue Owl and private credit’s structural problem
Financial Times
February 23, 2026
AI-Generated Deep Dive Summary
The New York-based asset manager Blue Owl is facing significant challenges, raising concerns among investors about broader issues within the private credit industry. These troubles have cast doubt on the stability and practices of private credit firms, leading to heightened nervousness in financial markets. The situation at Blue Owl underscores potential structural problems that could have far-reaching implications for the sector.
Private credit has seen rapid growth over recent years, driven by high demand from institutional investors seeking higher returns compared to traditional fixed-income assets. However, this growth has been accompanied by rising leverage and aggressive risk-taking. Critics argue that some firms, including Blue Owl, may have prioritized expansion over prudence, potentially leaving them vulnerable to market downturns or unexpected defaults.
The issues at Blue Owl highlight the importance of regulatory oversight and transparency in the private credit sector. While private credit funds are often less scrutinized than public markets, their size and interconnectedness mean that problems within one firm can quickly escalate into systemic risks. Investors are now closely watching whether regulators will impose stricter guidelines or if industry practices will evolve to address these concerns.
For businesses and financial institutions, the situation at Blue Owl serves as a reminder of the importance of robust risk management frameworks and the need for greater accountability in private credit transactions. The potential fallout from Blue Owl's struggles could have significant implications for institutional investors, particularly those with allocations
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Originally published on Financial Times on 2/23/2026