New Warning on Private Credit Dangers

Activist investor Boaz Weinstein is stepping up his warnings on private credit, saying the turmoil surrounding Blue Owl Capital’s funds is exposing deeper cracks in the $1.8 trillion industry. “I think we are in the super-early innings of the wheels coming off the car,” the Saba Capital Management founder said Tuesday at a conference in Miami Beach, Florida.

The inherently opaque industry has been reeling from worries about lending standards and overspending on artificial intelligence. After Blue Owl, an alternative investment firm, restricted redemptions in one vehicle and began selling loans to raise cash for investors, Saba along with Cox Capital Partners announced cash tenders for stakes in three funds Blue Owl managed—at steep discounts to their stated value.