For Private Credit Investors, a Whodunit With a Twist

Get your rumpled raincoat and trilby, there’s a case to crack! Investors are hiring private investigators to help them track the performance of their private credit funds. Portfolio managers have a lot of discretion and investors want to know: “What’s the true value of the debt here?” a top sleuth from corporate investigations firm K2 Integrity told Bloomberg News last week.

Trouble is, in private lending there’s rarely if ever a smoking gun or great reveal. As the booming $1.7 trillion asset class ran headlong into sharply higher interest rates and slowing economies in the past year or so, skeptics started to worry about the state of many loan funds. The managers of different private lenders have also been reporting some pretty varied values for the same loans, according to an investigation by Bloomberg News last month.