"The total value of companies in the private credit market has increased over the last year but the quality of much of the debt they have issued has declined, according to an analysis by Lincoln International, an investment bank advisory service that monitors that market.The new data sheds some light on a $3 trillion market that has recently been unnerved by Blue Owl Capital's decision to ban retail investors from cashing out of one"
"Lincoln looked at 7,000 company valuations, using data from over 225 asset managers globally, within its Private Market Index. It found: The enterprise value of the companies in the $250 billion index increased by 1.9%. Growth in earnings before interest, taxes, depreciation and amortization (Ebitda) among companies that have issued private debt is in decline, largely because the number of high-growth companies is in decline, lowering the average level of profitability across the index."
7,000 company valuations from over 225 asset managers show enterprise value in the $250 billion index rose 1.9% while debt quality deteriorated. Ebitda growth slowed to 4.7% in Q4 2025 from a 6.5% peak in Q2 2025, driven by fewer high-growth companies and a decline in firms with 15%+ earnings growth from 57.5% in 2021 to 48.2% today. The shadow-default rate climbed from 2.5% to 6.4% as more firms accepted unexpected extra lending conditions. Company leverage has increased, compressing lender returns, and lower Fed rates plus strong demand have reduced investor yields. Blue Owl's restriction on retail redemptions coincided with a 6% share drop.
Read at Fortune
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