At a PIMCO media conference in London on April 15, the firm's group chief investment officer, Daniel Ivascyn, said the private credit market does not pose a systemic threat to the broader financial system.
The private credit sector, which the article notes is valued at roughly $3.5 trillion, has been under scrutiny this year after a range of issues - including risks associated with artificial intelligence, fund outflows and concerns about credit stress - weighed on the shares of alternative asset managers. PIMCO itself manages more than $2 trillion in assets.
"We do not see systemic risks within private credit, we see disappointment, we see lower returns than anticipated," Ivascyn told attendees. His remarks framed the current difficulties in the sector as performance and liquidity problems rather than threats to financial stability.
Ivascyn said he anticipated an increase in private credit trading activity given constraints on liquidity within parts of the market. He described a process in which risk can be transferred through multiple channels, and added that necessity will drive sellers to the market.
"So out of necessity, there's going to be a lot more of this selling, and that's going to create a great opportunity for investors with fresh balance sheets, including PIMCO," he said.
According to Ivascyn, PIMCO has already taken part in certain transactions that capitalize on this dynamic, and he expects more motivated sellers to emerge later in the year. He did not provide details on specific transactions at the conference.
Media reporting cited in the briefing indicated PIMCO purchased all $400 million of bonds issued by a Blue Owl Capital private credit fund, with those reports attributing the information to people familiar with the matter. Ivascyn himself declined to identify particular deals in his prepared remarks.
The private credit landscape has also seen several large alternative asset managers limit redemptions from private credit funds. The companies named include Blue Owl Capital, Ares Management, Apollo Global, Blackstone and KKR.
Commenting on defaults in the sector, the head of Ares Management said that private credit defaults remain relatively contained and that the principal stresses being observed are driven by liquidity and higher interest rates. That characterization aligns with Ivascyn's emphasis on rate- and liquidity-related pressures rather than systemic credit contagion.
This reporting reflects comments made at the PIMCO event and accounts of transactions described in media reports; it does not introduce details beyond those presented at the conference or in the cited reporting.