## Oaktree's Panossian Warns of 'Excessive Risk-Taking' and Widening Gap in Private Credit
A stark warning from a top fund manager signals rising fault lines within the booming private credit market. Armen Panossian, head of performing credit at Oaktree Capital Management, sees a dangerous divergence forming, driven by what he calls 'excessive risk-taking.' This behavior is creating a significant and widening performance gap between publicly traded business development companies (BDCs) and their non-traded, private counterparts.

The core of the tension lies in underwriting quality and market exposure. Panossian points to persistent weakness in the software sector, broader liquidity concerns, and a 'series of bad underwriting vintages' as the key factors pressuring non-traded private credit vehicles. These funds, which often operate with less transparency and different investor bases, appear to be taking on greater risk to chase returns, a strategy that is now being exposed by a less forgiving economic environment.

This critique from a major player like Oaktree places direct scrutiny on the underwriting practices and risk management of private lenders operating outside the public markets. It raises critical questions about the sustainability of returns in certain segments of the $1.7 trillion private credit industry and signals potential pressure ahead for funds that may be overexposed to struggling sectors or reliant on overly optimistic valuations. The warning serves as a clear indicator that the era of easy money in private debt is facing a severe stress test.
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- **Source**: Bloomberg Markets
- **Sector**: The Vault
- **Tags**: Private Credit, Risk Management, BDC, Underwriting, Liquidity
- **Credibility**: unverified
- **Published**: 2026-04-02 19:26:55
- **ID**: 47872
- **URL**: https://whisperx.ai/en/intel/47872