Investment Firm Accuses Blue Owl of Hiding Losses in $2 Trillion Credit Market

Glendon Capital Management alleges that Blue Owl and other private credit firms are concealing portfolio weaknesses and misrepresenting loss rates. The accusations come as investors brace for potential bad news in the roughly $2 trillion private credit market following recent credit issues.

An investment firm is raising red flags about potential problems lurking within the private credit industry, specifically targeting Blue Owl and similar companies for allegedly hiding portfolio weaknesses, according to a Financial Times report published Thursday.

Glendon Capital Management claims that Blue Owl and numerous competitors have “misrepresented” the actual loss rates within their investment portfolios and are concealing “larger losses than reported,” the Financial Times stated, referencing a company presentation.

The allegations surface as market participants prepare for potentially troubling developments following several recent credit problems that have intensified examination of the approximately $2 trillion private credit sector.

Reuters was unable to independently confirm the Financial Times report. Blue Owl has not yet provided a response to requests for comment made after standard business hours, and a Glendon representative has not replied to LinkedIn inquiries.

Blue Owl, headquartered in New York, oversaw more than $300 billion in assets at the end of December.

According to the Financial Times, Glendon specifically challenged Blue Owl’s loan valuations within Blue Owl Capital Corporation, one of its most significant funds.

The newspaper reported that Blue Owl’s elevated loan valuations at the close of 2025, when compared to current public market prices for debt from identical companies, raised Glendon’s “concerns about the true valuation” of the portfolio.

These worries have intensified due to Blue Owl’s recent difficulties, which became apparent late last year when the company restricted fund withdrawals. Additional investor anxiety emerged last month when the firm sold stakes in other alternative asset management companies.

The broader industry faced additional pressure Wednesday when Morgan Stanley imposed redemption limits on one of its private credit funds, while JPMorgan Chase wrote down the value of certain loans to private credit funds.