Pedro Capitão Barbosa, managing associate at Morais Leitão, was quoted by Jornal Económico in an analysis of the pressure that several international fund managers are currently facing in the credit market, in a context marked by capital outflows, asset devaluations and increased investor uncertainty.
The article notes that Blackstone recorded net outflows of 1.7 billion dollars in the first quarter from its BCRED fund, dedicated to credit, which is valued at around 82 billion dollars. As a result, the manager increased its redemption limit from 5% to 7%. The article also highlights other signs of tension in the sector, such as the decision by Blue Owl Capital to sell credit-related assets in order to return capital to investors and reduce debt, in a scenario where several large fund managers have accumulated significant stock market losses since the beginning of the year.
In this context, Pedro Capitão Barbosa identifies the factors behind investors’ reaction. According to the lawyer from Morais Leitão’s Capital Markets team, the outflows may be driven by “significant writedowns (reduction in the value of an asset) and write-offs (recognition of a loss)” of loans made by these funds.
He also notes that there is “some sense of uncertainty regarding the medium-term prospects of software as a service companies, to which this market is particularly exposed, due to advances in artificial intelligence.”
Despite these signs of tension in the market, the lawyer stresses that the situation is unlikely to generate broader systemic effects, stating that “in any case, the recent events are not expected to have systemic consequences.”
Read the full article in Jornal Económico.
