Private Credit BDC ‘Reckoning’ to Last Years, Sixth Street Says

The $1.8 trillion private credit industry may need years to work through an “intense yet warranted reset” that has caused a wave of redemptions from some of the market’s biggest funds, according to Sixth Street Partners.

“While some may believe today’s volatility is only a minor episode to be weathered, we believe there is going to be an honest reckoning for the sector resulting in a healthier and more resilient direct lending industry,” Sixth Street Specialty Lending, one of the firm’s funds, wrote in a letter to investors on Tuesday.