Investment fund questions valuations in Blue Owl’s private credit portfolio, FT reports

March 12 (Reuters) – Glendon Capital Management has said that private credit lenders such as Blue Owl are obscuring weaknesses in their portfolios and a sharp correction in debt markets is approaching soon, the Financial Times reported on Thursday. 

Investment firm Glendon said that private credit funds managed by Blue Owl and many of its rivals had “misrepresented” loss rates in their portfolios and were sitting on “larger losses than reported,” the FT reported, citing a presentation.

Investors are bracing for a flurry of bad news after a string of credit issues in recent weeks drew fresh scrutiny to the roughly $2 trillion private credit market.

Reuters could not immediately verify the report. Blue Owl did not immediately respond to a request for comment outside regular business hours. A Glendon representative did not immediately respond to a request for comment on LinkedIn.

New York-based Blue Owl managed more than $300 billion in assets as of December 31. 

Glendon criticised Blue Owl’s valuation of loans inside one of its largest funds, Blue Owl Capital Corporation, the FT said.

Blue Owl’s higher marks on its loans made at the end of 2025, compared with current public trading prices of debts tied to the very same companies, gave Glendon “concerns about the true valuation” of its portfolio, the newspaper said.

Concerns have been compounded by troubles at Blue Owl, which emerged late last year when it moved to limit withdrawals from a fund. Last month, the firm worried investors by selling shares of other alternative asset managers.

On Wednesday, Morgan Stanley limited redemptions at one of its private credit funds, and JPMorgan Chase reduced the value of some loans to private credit funds. 

(Reporting by Gursimran Kaur in Bengaluru; Editing by Harikrishnan Nair)