In the $3 trillion private credit market, the ‘shadow default’ rate is increasing as more money chases lower-quality deals

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 of its private debt funds, in favor of returning their...