Published in partnership with Blue Owl Capital.
The $2 trillion private credit market is entering its most challenging environment since 2008, raising a critical question for institutional investors: can the asset class demonstrate resilience when it is finally being tested?
James Clarke, global head of institutional capital at Blue Owl Capital, argues the concerns are overblown. While the asset class has faced headwinds including the high-profile collapse of First Brands last year, private credit continues to meet its return objectives and deliver downside protection for investors. For Blue Owl, achieving these objectives means selectivity around deals, as well as diversification across industries, geography and position sizes.
“You’re not going to get them all right. But when I think about our loss rates, I think about the different environments that we’ve managed through, I feel strongly that the process works and institutions are always going to focus on the process. Process is what matters,” he says.
In this conversation, Top1000funds.com editor Amanda White spoke to Clarke about the credit cycle, the evolution of private credit, data centre financing, and what institutional investors should expect from their managers.