Newsletter · 2026-09-30 · Ashutosh Agarwal

Private Credit Funds Face a Line at the Exit as Hayfin Raises 15 Billion Euros - Private Credit & Alternatives - Week of September 30, 2026

Private Credit & Alternatives for the week of September 30, 2026. Podcast synthesis on redemption requests at Blackstone's BCRED running at twice its cap, a closed-end-fund specialist's case that the private credit boom is over and mergers come next, alternative-manager stocks sorted by how sticky their money is, Hayfin's 15 billion euro institutional fund, and a Q1 report card on five listed BDCs.

Private Credit & Alternatives

Week of September 30, 2026: Private Credit Funds Face a Line at the Exit as Hayfin Raises 15 Billion Euros

For most of the summer, the private-credit argument ran on one question: are the loans going bad? This week, a closed-end-fund specialist who trades these vehicles for a living went on two podcasts and gave a blunter answer to a different question. The boom, he said, is simply over. "There's no new money, no new capital flowing into that strategy right now." The loans matter. But the bigger story, in his view, is the packaging. Funds were sold to ordinary investors as if you could always get your money back, when the fine print always said you might have to wait in line.

That line is now long. By his account, the largest retail private-credit fund in the country got withdrawal requests for about 10% of its shares this quarter, twice what it allows. What happens to that line next is the real subject of this issue. Funds can list on the stock market at a steep discount. They can shut down and hand cash back slowly. Or they can merge into bigger rivals. He expects a merger wave next year.

The same week showed the other side of the market. A European direct lender with almost no retail money closed a €15 billion fund, one of the biggest ever raised for Europe. And the main thing it told us about the crisis in America is that borrowers have started asking their lenders where the money comes from. The split is getting sharper. Money that can't leave is being rewarded. Money that can leave is heading for the door.

TL;DR

• "The private credit boom is over," and the next chapter is mergers, not growth. On Other People's Money with Max Wiethe (the same interview also ran on Monetary Matters with Jack Farley), James Elbaor of Marlton LLC said Blackstone's $82 billion BCRED got redemption requests for about 10% of its shares (roughly $8 billion) against a 5% cap. His argument: "Gating is doing what it was designed to do... the bigger issue is that the product was sold as if the gate did not exist." He expects "a lot of merger activity within the BDC space" starting next fiscal year, at or even above stated value. He also argued that listed BDCs at "60, 65 cents on the dollar" are showing you the price of liquidity, not a verdict that the loans are broken.
• The stock market is sorting alternative-asset managers by how "sticky" their money is. Elbaor put numbers on it. Since roughly April, he said, Apollo and Blackstone are down about 12%, Ares and KKR about 22%, and Blue Owl "nearly 35%." Meanwhile Pershing Square, which runs money that can never be withdrawn, has doubled since its April IPO. His verdict: the market is "penalizing... alt managers that moved very heavily into investments in private credit and wealth channel."
• A €15 billion vote of confidence, from money that can't run. On Cloud 9fin, Hayfin's co-head of direct lending, Mark Bickerstaffe, said the firm's all-institutional investors were barely touched by the retail-fund scare. If anything, the scare became "something of a tailwind" as big investors went looking for "more conservative fund structures." His most striking detail: for the first time, borrowers are sending term sheets that ask lenders about their "funding sources and exposure to retail or semi-liquid vehicles."

What's New

1. The problem is the wrapper, not (yet) the loans, and there are only three ways out. The week's sharpest analysis came from James Elbaor, founder of Marlton LLC. Marlton specializes in closed-end funds, listed private assets, secondaries and the asset managers themselves, and it trades these vehicles. He appeared on Other People's Money with Max Wiethe (Sep 27), and the same interview was published on Monetary Matters with Jack Farley. He is a practitioner with positions, not a neutral commentator. That makes his view more informed and also more interested.

His starting point is that the summer's gating (funds capping how much investors can withdraw) is not a malfunction. "Gating is doing what it was designed to do. So I think the bigger issue is that the product was sold as if the gate did not exist." In plain terms, these funds hold loans that can't be sold quickly, inside a wrapper that promises some regular liquidity but "can't always deliver" it. He called it "a classic duration risk issue, similar to like a bank where you're borrowing short and you're lending long, and then when everyone asks for their money back, you have a run."

The bellwether is BCRED, Blackstone's flagship private credit fund for wealthy individuals. Elbaor called it "an $82 billion private credit vehicle that also includes leverage." It "capped redemptions again this quarter when redemptions exceeded 5%... They received requests for 10% of the shares outstanding, so about $8 billion." He was careful not to overstate it: "I wouldn't say that there's trouble in the market. There's just a line for those that want out." He added a detail that points the other way, though: BCRED "has seen subsequent marks down over the last four quarters... an entire year of consistently quarterly markdowns."

So what can a manager with a line at the door actually do? Elbaor listed the options, and this is the most useful framework of the week.

• List the fund on the stock market. From 2020 to 2024 this was a money machine. You invested at net asset value, or NAV (the fund's own estimate of what its holdings are worth), and the fund listed at a premium. "That doesn't work anymore." His example was Bluerock's total-income real estate fund, ticker BPRE. When it converted from an interval fund and listed, it "immediately traded to a 38% discount" to NAV. "That window is absolutely closed."
• Wind down. He described a Blue Owl BDC that "stopped offering quarterly liquidity and just said we're going to completely wind down the portfolio and return cash as quickly as we can." (A BDC, or business development company, is a type of fund that lends to mid-sized private businesses and pays out most of its income.) He called this vehicle "OBDC." Blue Owl's flagship OBDC is already listed on the stock exchange, so he is most likely describing one of its non-traded sister funds. Treat the exact vehicle as unconfirmed.
• Merge. "I think you're going to continue to see more mergers, tender offers, and consolidation within these private credit vehicles over the next five years. This is not a growth story any longer."

The surprise is that he expects mergers at full value or better, not fire-sale prices. His examples: "MLCI or Mount Logan purchased TURN at 110% of nav," and Source Capital (SOR) got an unsolicited bid at "101 of nav." The logic works like a corporate takeover. A fellow asset manager, a "strategic" buyer in deal language, can pay more than a financial buyer because "bigger is better. More assets is better," and it can spread the cost over years of management fees. He named Aberdeen as one acquirer that has been active in the space, and added: "You're already seeing a large CLO provider being bid on by Goldman Sachs." So why hasn't the wave started? "What is NAV? Like, is NAV real? Is that a real number that I can trust? And that is why we haven't seen a lot of merger activity... But it's coming. It's coming."

2. The 60-cent question: is it a liquidity discount or a hidden markdown? Here is the puzzle Elbaor laid out. Private BDCs are valued at NAV. Similar BDCs that trade on the stock market sell for much less. Either both NAVs are right, in which case "the cost to get out is somewhere in the line of 60, 65 cents on the dollar." Or the price of liquidity is modest, "5% annualized," in which case "nav needs to be marked down to 60 cents on the dollar." Asked which he believes: "We think it's a cost of liquidity."

The trade he takes from that is blunt. "If you have the exposure to the privately listed interval funds, you are certainly redeeming. And if you want to keep that exposure, you are straight buying publicly listed BDCs that are yield producing. That is absolutely the play. And we are doing that ourselves." (He wouldn't name holdings.) His firm's version is "event driven." It doesn't bet that deep discounts simply shrink. It bets on mergers. A fund trading at a 38% discount that gets absorbed, share-for-share at NAV, by a fund trading at a 25% discount instantly jumps in market value. "Those that are trading at lower discounts are going to be acquirers in the next fiscal year." He also flagged BPRE as the case to watch: "that's going to dictate how a lot of these... others are going to start to react."

He is not complacent about the loans. The house view is a split one: "we don't think that defaults are going to be catastrophically high, that the discounts don't make sense. But we do think it's going to be higher than what other institutions are pricing." The reason is software. "The estimated exposure to SaaS by private credit is over half a trillion dollars. And not every single one of those SaaS companies is going to make it." (SaaS means software-as-a-service: companies that sell software by subscription.) He added a macro worry: rising rates and "risk premia" (the extra return investors demand for taking risk) are "a problem when you have a heavy SaaS component that is going to need to refi into a higher rate environment." He also said in passing that the Fed may be starting "potentially a whole new... hiking cycle." That aside matters, because every BDC's income depends on where rates go.

On the "is this 2007?" question, he pushed back. Bank lending to "non-bank financial institutions" is growing, but that bucket is "a lot bigger... than just private credit." Much of it is "mortgage warehouse lines" and loans to broker-dealers. He has no strong view on systemic risk. His strong view is on the wrapper: CLO, closed-end fund, UK investment trust, interval fund or insurance balance sheet. The wrapper "is going to make a material difference as to how people make money in this space."

3. Why the market is repricing the big alternative managers, and why private equity hasn't had its reckoning yet. The second half of Elbaor's interview turned to the managers themselves. His scorecard, measured from around April: "Apollo and Blackstone. Those are down roughly around 12%. Ares, KKR 22, Blue Owl down nearly 35%." Pershing Square, by contrast, is "trading roughly at around $50 a share. It's double its IPO earlier this year in April."

His explanation is about cost structure and staying power. Firms that "spent a lot of money on building out big teams... specific to targeting wealth channels" are stuck with those costs now that the retail money has dried up. "You have probably at least 100 people working at KKR and or Apollo... just in business development people out there pitching the wealth channel," against "less than 100 people" at all of Pershing Square. What the market now rewards is permanent capital: money that can never be withdrawn, so the fee stream works like an annuity. He compared it to owning "2% of the AUM that Berkshire has in perpetuity. What is the valuation of that?... You'd value that at a very high earnings multiple."

He warned that "permanent capital" is not an accounting standard, and managers define it their own way. "It's either KKR or Apollo's [that] defines... permanent capital as any capital that they have that is longer than eight years." Under that definition, a 10-year fund counts. He also offered a concrete reason investors might prefer a listed permanent vehicle to a private fund: borrowing costs. A loan against your stake in a private hedge fund (a "NAV line") might cost "SOFR plus 10, possibly SOFR plus seven." A margin loan against listed Pershing Square shares costs "SOFR plus two. Sometimes SOFR plus one." (SOFR is the benchmark overnight interest rate that most floating-rate loans are priced from.) His prediction: "we are going to see a massive permanent capital boom," and he named Thrive Capital's permanent vehicle, Thrive Eternal, as a possible future IPO.

Why has private credit taken the headlines while private equity hasn't? "They have more time." Credit funds promise quarterly liquidity. Private-equity funds "may have another five, seven years left in their cycle before they have to even return a single dollar," and are "marked many times to model" (valued with a spreadsheet rather than a market price). But he said the pressure is already showing up where it matters most for PE, in fundraising. Investors want their original money back within about five years, known as a "DPI of one" (distributions equal to what they paid in). He said Marlton is "seeing it with the funds in the middle market that we track that are having trouble raising fund seven, raising fund five... because fund two still hasn't returned back the entirety of the fund."

4. The counterpoint: a €15 billion fund raised almost entirely from institutions. For the other side of the split, go to Cloud 9fin (Sep 23). There, 9fin's Sunni Jonsson interviewed Mark Bickerstaffe, co-head of direct lending at Hayfin, about the firm's €15 billion fifth direct-lending fund. He is an operator, and naturally upbeat about his own raise. But the detail is worth having.

The first point is that the money came to Europe. "Investors rebalancing portfolios away from the US towards other geographies," and Europe "has definitely been one of the big winners of that diversification." Europe is "less mature than the US, less competitive and less deep," with "fewer managers of real scale." New money came from "the US... the Middle East, Korea." The second point is that the retail scare barely touched Hayfin: "our investor base at Hayfin is institutional. So a lot of the focus and the scrutiny around US BDCs, retail capital, semi-liquid vehicles hasn't really impacted us." He sized the European private-credit market at "15 to 20 percent of the US market," and the European semi-liquid retail share at "less than 5 percent."

The American retail story still reaches Europe, though, and in two ways. First, US BDCs usually keep "a bucket of around about 20 percent" they can invest outside America, and much of it went to Europe. With less money flowing into those funds, "many large managers who in perhaps 2024, 2025 could be in Europe saying we can underwrite a billion, maybe even above a billion ticket size... this year we've seen that drop. So it's more 200, 300, 400." Fewer lenders can write big checks, and that helps whoever still can. Second, and this is the most interesting line of the week: "we've seen... first couple of times on grids and term sheets that we've received from borrowers asking around lenders funding sources and exposure to retail or semi-liquid vehicles... We hadn't seen that before." Private credit sells itself to private-equity owners as a patient, locked-up partner. Now the borrowers want proof that their lender won't face a run of its own.

On credit quality he was reassuring, and specific. The watch list is "in line with historical averages," it peaked in "late 23, 24" as inflation bit, and names on it have been "declining" over 18 months. Software is "about 6%" of the book. He called that underweight, and said the reason was partly that software deals in 2022–24 carried "very high" leverage. Another "15 to 20%" sits in "medium AI risk," based on a consultant-led "traffic light" review Hayfin started "at the start of 2024." He watches the same thing the bears do: "the 2028 and the 2029 maturities, which go back to that sort of 21, 22 vintage," which were "structured pre-rates increases" at high purchase prices. "I fully expect that that vintage is going to take longer to exit." Hayfin is sorting those loans into companies to refinance, companies that will need "equity or PREF or some kind of structuring," and companies to exit. He expects this to be "an increasing market theme in 2027."

A few more numbers. Hayfin invested "just under 6 billion" in 2025 and is at "around four and a half" so far this year. M&A (companies buying and selling each other) had a "subdued first half," hit by the Middle East in the first quarter and by AI and software fears, then saw "a step change" in July. Where does he see the best opportunities? "Capital solutions," which he described as "low mid-teens return" lending that sits between direct lending and distressed investing, where "there are more demand for capital than there is supply." Much of that demand comes from sponsors who need to return cash to their investors. The other is asset-backed lending, where Hayfin has put "over 12 billion" across real estate, shipping and healthcare. And one sector is booming because of AI rather than despite it: B2B conferences and events, where "there's a real value put on live experiences." Hayfin stayed on as lender through change-of-control sales of two UK event businesses, Closer Still and Hive.

5. The BDC report card: the income is covered, but only just. For an investor-level view of the listed BDCs, the week brought a run of episodes from Michael Garza's BDC Stock Breakdown. Garza is a retail income investor and commentator, not an insider; he says repeatedly that it is "not financial advice." One important caveat: every figure he uses is from the first quarter of 2026 (to March 31), which is now two reporting periods old. Read it as a pattern, not a current snapshot.

The same pattern shows up in all five. Income is falling as interest rates drop, because these funds' loans are almost all floating-rate. The yield on BXSL's performing loans slipped "from 9.6% to 9.3%," and its net investment income went from $0.83 a share a year earlier to $0.77. Dividends are covered with no room to spare. Problem loans are rising. NAV is falling: BXSL down about 2.5% in the quarter, CCAP "almost 7%" in a year. Software is a big exposure at the biggest names, "approximately 21%" of BXSL, where Garza singled out Medallia as "one of the portfolio's more visible problem loans," now in a restructuring. Two managers are shoring up their funds. Crescent "permanently reduced its base management fee from 1.25% to 1%" and cut its incentive fee from 17.5% to 15%. At Barings, the parent company agreed to a "$67 million cash payment" to end a credit-support agreement on loans inherited from Sierra Income, and authorized up to $30 million of buybacks below NAV. Garza's verdict on CCAP captures the whole group: "inexpensive, but it has not yet proven that it is safely inexpensive."

These discounts, 11% to 39% on Garza's March numbers, are the "60–65 cents" gap that Elbaor wants to trade. The two podcasts are looking at the same thing from opposite ends. Elbaor sees a liquidity discount that mergers will close. Garza's numbers show why part of it may be a real earnings discount.

6. The retail pipes: education, "safe" alternatives, and loans settled on a blockchain. Two operators this week showed where the wealth-channel money is going now that direct lending has lost its shine.

On Modern Financial Advisor (Sep 24), Frank Burke of PPB Capital Partners, which builds private-markets platforms and white-label funds for financial advisors, made the retail lesson explicit. "People don't really understand what they have. And we saw that in the early part of the year, just with all the redemptions and some of the interval structures around private credit and clients having no idea that what they thought was completely liquid was not." Liquidity, he said, is "the number one thing in terms of education." His answer is to move clients toward cash flows they can see. Asset-backed lending gained "more traction as some of the other private credit strategies and direct lending have been under some stress... in terms of lending to particularly software companies." His favorite example is legal settlement finance. That means lending to law firms only once a case has settled and "the cash is actually in escrow," so you take out funding that costs the firm "north of 25%" and earn "mid-teens returns" with "no case risk." (Some risk remains: he noted some plaintiffs "may not be eligible for that distribution.") One more sign of the times: some advisors now want to launch "actual interval funds themselves." Those are the same semi-liquid wrappers at the center of this year's gating.

On London Fintech Podcast (Sep 23), Anant Kumar of Benefit Street Partners, Franklin Templeton's roughly $90 billion credit arm and, he said, "the world's 10th largest CLO manager," described two developments worth knowing. First, a new shape for AI financing. A company wants $100 million of Nvidia chips, and Nvidia wants cash up front. BSP lends a short bridge loan, around six months. Once the chips are installed, "burned in" and verified working, a "smart contract" (code on a blockchain that pays out automatically when conditions are met) releases money the borrower raised by selling tokens, and that repays BSP. It is asset-based lending against GPUs, with the risk concentrated in the gap between buying the chips and switching them on. Second, a plain look at how dated the loan market's plumbing is. US leveraged loans are "north of $1.5 trillion... larger than the high yield bond market," yet a trade "could take up to two weeks" to settle, because "loans aren't securities" and rely on "loan closers, people picking up the phone." He said some players resist faster settlement because "there's some economic value they get from not having loans settled really fast." BSP also bought the first tokenized commercial paper from Galaxy Digital on the Solana blockchain, with the paper "held in trust by JP Morgan" and repaid in a stablecoin. It hasn't done a second deal yet.

And a small-scale echo of the big conflict-of-interest question: on PassivePockets (Sep 29), a group of individual real-estate investors picked apart a sponsor that wants to open an income fund to lend to its own manufactured-housing deals. The pitch is to replace outside lenders who charge "13, 15, 17%." The panel's question, "which master do you serve?", is the same one Elbaor raised about BDCs merging with sister funds under the same manager. They cited the DJE Income Fund, whose manager lent to his own portfolio and "has now been convicted," and concluded that an outside lender adds a layer of checking you shouldn't give up lightly. This is individual investors talking, not institutions. But it shows how widely the "who is really on the other side of this loan?" worry has spread.

The Debate

Bull case: it's a liquidity problem with a price tag, and the price is attractive. Elbaor's version: "Gating is doing what it was designed to do." The line to get out is orderly. BCRED will pay requests out over time. And listed BDCs at 60–65 cents are pricing liquidity, not losses, which he says is a buying opportunity his firm is using. Hayfin's version: at an institutional manager with locked-up money, the watch list is normal and falling, new money is still coming in by the billions, and a smaller pool of big-ticket lenders means better terms for those still lending. Deals picked up in July. And consolidation at NAV-plus, if it arrives, would put a floor under the most discounted vehicles.

Bear case: the discount is partly earnings, and the calendar is not friendly. On Garza's first-quarter numbers, the big listed BDCs are covering their dividends with nothing to spare. Their income is shrinking as rates fall, problem loans are rising, and NAVs are sliding. One manager has already cut its dividend by a fifth. Elbaor himself expects defaults "higher than what other institutions are pricing." He puts private credit's software exposure at "over half a trillion dollars," and he cited a year of "consistently quarterly markdowns" at BCRED. Even the optimist, Hayfin's Bickerstaffe, pointed to the same trouble spot as last week's bears: the 2021–22 loans maturing in 2028–29, which he expects to take "longer to exit" and to need extra equity or restructuring. The bull case also leans on a question neither side can yet answer, the one Elbaor put himself: "Is NAV real?"

Where they agree. Both of this week's practitioners, one trading the vehicles and one running the loans, agree that the wrapper now decides the outcome. Locked-up institutional money is being rewarded. Retail money that can leave is being penalized. The 2021–22 vintage is where credit pain will show up. The argument has moved from "is private credit fine?" to "which private credit, in which wrapper, bought at what price?"

The Names in Play

• Blackstone (BX) / BCRED / BXSL. BCRED, "an $82 billion private credit vehicle," got requests for about 10% of shares (~$8 billion) against a 5% cap and has had four straight quarters of markdowns, per Elbaor. BX stock is down roughly 12% since April on his numbers. BXSL: 8.1/10 from Garza on Q1 figures, with dividend coverage at exactly 100%, non-accruals at 3.1% and software at 21%, and Medallia under restructuring.
• Blue Owl (OWL). "Down nearly 35%," the worst of the big managers on Elbaor's scorecard. He said one Blue Owl BDC has moved to wind-down instead of quarterly liquidity (vehicle identity unconfirmed; see above).
• Ares (ARES / ARCC), KKR, Apollo (APO). Ares and KKR down about 22%, Apollo about 12%, per Elbaor. ARCC's Q1 core EPS of $0.47 fell just short of its $0.48 dividend, NAV slipped to $19.59, and non-accruals rose to 2.1%.
• Hayfin. €15 billion fifth direct-lending fund from institutional money. Software at 6% of the book, another 15–20% at medium AI risk, and a plan already in place for its 2028–29 maturities.
• Pershing Square. Elbaor's example of what the market pays for permanent capital: about $50 a share, double its April IPO, and valued at roughly Apollo's and Blackstone's former peak multiple.
• Goldman Sachs. Bidding on "a large CLO provider," per Elbaor, as an early sign of consolidation.
• Merger comparables: Mount Logan (MLCI) / TURN, Source Capital (SOR), Aberdeen. TURN was acquired at 110% of NAV and SOR drew an unsolicited 101% bid. Aberdeen was named as an active consolidator.
• Bluerock (BPRE). Listed at a 38% discount to NAV after converting from an interval fund. Elbaor calls it the case "anybody that's interested in the space needs to monitor."
• Crescent (CCAP), Barings (BBDC), Bain Capital Specialty Finance (BCSF). The most discounted names in Garza's set. CCAP cut its dividend 19% and its fees; BBDC slightly under-earned its dividend and got a $67 million payment from its parent; BCSF covered its dividend exactly, with low problem loans.
• Franklin Templeton / Benefit Street Partners. GPU bridge lending with on-chain takeouts, and tokenized commercial paper with Galaxy Digital.

Read-Throughs

• Watch the mergers, not only the marks. If Elbaor is right, the next big private-credit headlines will be deals: sister funds merging, tender offers, strategic buyers paying NAV or better. How those deals are priced is the best real-world test of whether NAVs are trustworthy. A merger at NAV-plus supports the marks. A merger at a haircut, which he says has already happened at least once, undercuts them. Related-party mergers within the same manager deserve extra scrutiny.
• The discount gap is the market's lie detector. Listed BDCs trading at 11–39% below NAV, while private versions of similar portfolios sit at full value, is the single cleanest sign of how the market is pricing this. Either those discounts close through mergers and stable credit, or the private NAVs come down toward them. Keep an eye on BPRE's discount over time as the reference case.
• Borrowers are now judging their lenders, and that's a new kind of competition. Hayfin's point that borrowers are asking about "exposure to retail or semi-liquid vehicles" means where a lender's money comes from is now part of the product. Lenders with locked-up institutional money gain an edge in winning deals. Lenders that depend on redeemable retail money may have to pay up, in price or terms, to stay in the game.
• The manager stocks are being re-rated on how sticky their money is. On Elbaor's scorecard, the more a firm built around private credit and the retail sales channel, the harder its stock fell. Expect managers to lean hard on "permanent capital" in their messaging, and read the definitions closely. At least one big manager counts anything longer than eight years as "permanent."
• Falling rates are a slow squeeze on BDC dividends. Because their loans float, BDC income falls when rates fall, and many dividends were already covered at exactly 100% in the first quarter. If rates keep falling, more dividend cuts like Crescent's are likely. If Elbaor's warning of a new hiking cycle proves right, that eases the income squeeze but makes it harder for weaker software borrowers to refinance. Neither direction is a clean win.
• The 2021–22 vintage is the shared date on everyone's calendar. This week a practitioner-investor and an operator-lender, starting from opposite ends, both pointed to the same loans: made at peak prices before rates rose, maturing in 2028–29, and likely to need restructuring or extra equity. Hayfin expects the work to start in earnest in 2027. That is when "is NAV real?" gets tested loan by loan.

What Changed

Last week the money kept moving toward the safe, sellable end of credit and into liquid-feeling wrappers, with the basic mismatch left in place.

This week someone put that mismatch at the center of the story and named its likely ending. James Elbaor's case is simple. The product was sold "as if the gate did not exist." The line to get out is real, and at BCRED it is twice what the fund allows. Then he explained what the funds can do about it: listing is closed (BPRE opened at a 38% discount), winding down has begun, and mergers are coming, probably at NAV or better, once buyers trust the NAVs. For the first time this summer, the conversation moved past "are the loans bad?" to "what happens to the vehicles?" He also put a price on the managers' pain: Blue Owl down nearly 35%, while a permanent-capital vehicle doubled.

The other big change was a clear, well-documented example of the split. Hayfin's €15 billion raise from institutions shows that private credit as an asset class can still attract huge sums. It has to be the right money in the right structure, preferably outside the US retail channel. And even there, borrowers have started checking whether their lender could face a run.

What changed, in a sentence: the argument shifted from whether the loans are bad to what happens to the funds that hold them. The emerging answer is consolidation, rewarding patient, locked-up money and penalizing money that can leave. The bulls have an orderly exit line, a €15 billion raise and mergers priced at NAV-plus. The bears have 100%-or-worse dividend coverage, rising problem loans, a half-trillion-dollar software exposure and the same 2028–29 maturity wall. Neither side can yet answer the question that decides it all: is NAV real?