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By Naomi Rovnick
LONDON, May 12 (Reuters) - Private credit funds have marked down more than a tenth of their loans by at least 50%, new data from MSCI showed, as corporate borrowers in this $3.5 trillion market struggle with growing debt burdens.
MSCI said in a report released on Tuesday that a loan valuation of less than 50% was "a level typically associated with deep distress or risk of restructuring," citing a sustained period of relatively high
interest rates as one reason borrowers were struggling.
In recent days, big players in private debt including Carlyle, Blackstone and BlackRock have cut the value of their credit funds and regulators have warned about systemic risks arising from major banks lending to these asset managers.
Some of the main findings from the MSCI report.
• MSCI's data showed that private credit funds' loan writedowns were at the highest level since the aftermath of the COVID-19 pandemic.
• Smaller private debt funds were experiencing the most borrower distress, MSCI found, with 13% of their loans now valued below 50 cents on the dollar.
• MSCI's writedown data was collected in the third quarter of 2025, the most recent available from private credit funds that often report performance with a long lag.
• Delayed reporting by private debt funds had contributed to the trend of investors cashing out of stock market-traded credit vehicles known as business development corporations (BDCs), MSCI said.
• Private debt funds' returns slumped to 1.8% in the fourth quarter of 2025 from 3.7% six months earlier according to MSCI's calculation method that separates investment performance from the money funds receive from investors or pay out.
• In a survey accompanying this report, MSCI found that a third of investors said they lacked access to private market data that they fully trusted.
(Reporting by Naomi Rovnick; Editing by Keith Weir)
