Pimco Sees Private Credit Strains Triggering Wake-Up Call on Liquidity Risks

Mounting strains in the $1.8 trillion private credit market are giving investors a reality check and making them pay more attention to the illiquid nature of the asset class — and whether they are being adequately compensated for the risks, according to Pacific Investment Management Co.

Several high-profile blowups, and redemption pressures at some global private credit funds have added to investor concerns about loan quality and their exposures to software companies facing disruption from AI advances. Tighter monetary policy and sloppy loan underwriting have also exposed some of the vulnerabilities.