Private Credit Will Get Worse Before It Gets Better

One estimate puts the total value of the private credit market at $1.8 trillion.

As of the end of January, about 4% of private credit deals were in default. That’s about $72 billion:

The Federal Reserve’s pandemic-era crisis spending helped fuel historic inflation. The balance sheet has quietly grown again by $42 billion in February 2026. (Source: Illiquid Insights)

But, private credit being, well, private — it’s tough to tell just where the $72 billion in troubled assets are.

More importantly, one estimate puts the possibility of defaulted private credit deals at 10% — or $180 billion.

It’s no wonder private credit giants like Cliffwater and Blue Owl are halting redemptions. 

But bigger names in the financial markets — household names — are getting in on the game too. 

BlackRock announced limited redemptions last week. Morgan Stanley joined the group of halted redemptions yesterday. And as of this morning, J.P. Morgan Chase has joined the limited redemptions party.

In total, these financial institutions have north of $50 billion of private credit funds. And today, investors will be lucky if they can get out just half of their investment.

As Addison and I have noted this week, several macro trends are unfolding in the stock market. The late 2020s are shaping up to be an economic era all on their own: sell financials, buy energy.  

~ Andrew

P.S. Today, Addison is braving TSA lines — snarled amid a DHS funding snafu — to visit old friends in Panama.

He is traveling to join The Gathering, a group of investors in an international real estate project led by Grey Swan friend and associate Ronan McMahon and his team at Real Estate Trend Alert. 

Ronan stuck in the sand in Baja California — living the life!

I made the journey to Panama City in 2012 — even back then, it was a vibrant global city with plenty of first-world amenities, bustling with construction. In 2012, the very first of the artificial islands were being built, full with modern condos for foreign investors. 

Addison is getting a more in-depth look at some of the latest deals in Panama and beyond.

He’s recording a special Grey Swan Live! on scene in Panama City. We’ll let our paid-up fraternity members know once he reports in and the video is up on site. Learn more here…