Episode Details

This video is a clip from BND: Strategy Room Live Stream on May 16, 2026. This is an update on Private Credit. Private Equity has a problem as the industry has a glut of over $3 trillion in companies that need to be offloaded from their portfolios. PE net asset values are also being called into question. This leads us to Blue Owl. The valuation of their funds is coming into question. The Private Credit hot streak is officially over as defaults continue to rise. KKR’s private credit fund takes a $560 million loss. The defaults in the fund increased to 8.1% in the first quarter of 2026 and the fund had a write-down equal to about 10% of the NAV. At the same time, JPMorgan Chase led bank group reduced KKR’s line of credit. Federal prosecutors announced on Friday (right after the bell of course) that they are probing a BlackRock Private Credit fund due to write-downs and poor performance. The Federal Reserve is increasing NDFI lending disclosures for large banks (because they have the largest concentration). U.S. banks did disclose 1Q 2026 NDFI exposure. Finally, following up on MFS and First Brands. Bankruptcy administrators allege that MFS owner transferred half a billion dollars into personal accounts buying Ferrari's and Rolls Royce’s. The U.S. government asked the bankruptcy court to liquidate First Brands.