Treasury Secretary Expresses Concern Over Private Credit Market

Bessent says officials are monitoring the $1.8 trillion industry for potential risks to the broader economy.

Published on Feb. 23, 2026

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Treasury Secretary Scott Bessent has expressed concern over the rapid growth of the private credit market, which has reached $1.8 trillion in size. Bessent said the Treasury is closely watching the sector, particularly after recent issues at Blue Owl Capital, a major private lender, which sold off $1.4 billion in loans and lending commitments from three of its funds. Bessent warned that if there are problems in the private credit industry, they won't be passed on to individual investors, raising fears of potential contagion to the broader financial system.

Why it matters

The private credit market has boomed in recent years, with private lenders providing financing to companies that may not be able to access traditional bank loans. However, the opaque nature of the industry and its growing interconnectedness with the insurance sector have raised concerns about potential risks to the overall economy.

The details

Last week, Blue Owl Capital, a major private lender, sold $1.4 billion in loans and lending commitments from three of its funds, with some proceeds used to repay investors 30% of their capital from the oldest private credit fund, known as Blue Owl Development Corporation II (OBDC II), which is winding down. The move drew fresh scrutiny to the private debt market, which has never truly faced a crisis. Wall Street analysts generally approved of Blue Owl's loan sale, but some raised concerns about the firm's decision to eliminate the opportunity for investors to cash out of OBDC II on a quarterly basis. One aspect of the sale that raised eyebrows was the involvement of Kuvare, a Chicago-based insurer that Blue Owl acquired in 2024, as one of the buyers of the assets.

  • On February 23, 2026, Treasury Secretary Scott Bessent expressed concern over the private credit market.
  • Last week, Blue Owl Capital sold $1.4 billion in loans and lending commitments from three of its funds.

The players

Scott Bessent

The Treasury Secretary who expressed concern over the private credit market.

Blue Owl Capital

A major private lender that sold $1.4 billion in loans and lending commitments from three of its funds.

Blue Owl Development Corporation II (OBDC II)

The oldest private credit fund of Blue Owl Capital, which is winding down after scrapping a planned merger late last year.

Kuvare

A Chicago-based insurer that was one of the buyers of the assets sold by Blue Owl Capital.

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What they’re saying

“We are concerned. If there is something rotten, it is not going to be handed to the individual investors.”

— Scott Bessent, Treasury Secretary

“We don't believe there is a serious concern about a deterioration in private credit quality.”

— Chris Kotowski, Oppenheimer Analyst

“We don't have yellow flags. We actually have largely green flags.”

— Marc Lipschultz, Blue Owl Co-CEO

What’s next

The Treasury Department is expected to continue monitoring the private credit market for potential risks to the broader financial system.

The takeaway

The rapid growth of the private credit market has raised concerns among government officials about the potential risks it poses to the overall economy. The interconnectedness between private lenders and the insurance industry has added to these concerns, as regulators seek to prevent any contagion from spreading to the broader financial system.