Key insights
- Blue Owl and HPS private credit funds experienced their worst monthly losses since 2022, driven by a decline in the leveraged loan market and heavy redemptions. While year-to-date performance varies, the losses signal potential stress in the private credit sector, which could negatively impact broader market sentiment and credit availability for smaller companies.
Investing.com - Blue Owl Capital Inc. and BlackRock Inc.’s HPS Investment Partners reported negative returns in February, marking the worst monthly performance for their private credit funds in more than three years, Bloomberg News reported Friday.
Blue Owl Credit Income Corp., a non-traded business development company, lost 0.86% in February, according to Bloomberg calculations based on regulatory filings. The $26 billion HPS Corporate Lending Fund declined 0.3% for the month, according to its website. The losses for both funds were the worst since 2022, aligning with the leveraged loan market’s steepest monthly decline since that year.
The funds showed divergent year-to-date results despite their February declines. The $35 billion Blue Owl fund posted a loss of about 0.75% for the year, its worst start to a year since it began investing in 2021. The HPS fund recorded a 0.51% return for 2026, making it one of the few major peers to remain in positive territory.
Apollo Debt Solutions also posted a gain for the year, with a 0.39% return. The February losses come as private credit funds face heavy redemptions.
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