Dell’s family office is actively targeting private credit deals as a wave of forced sellers emerges in the secondary market.
Structural strain in private credit
Private credit is under pressure due to a core structural imbalance. The market has expanded rapidly to around $1.8 trillion, attracting investors seeking higher yields. However, many of these investments involve long-term, illiquid loans funded through vehicles that allow periodic redemptions. This mismatch between asset duration and investor liquidity is now being exposed as conditions tighten.
Rather than signalling a systemic collapse, the current situation reflects a more selective correction driven by liquidity stress. Certain segments, particularly tech-focused funds, are feeling the impact more sharply. For instance, Blue Owl Capital halted redemptions in one of its tech funds after significant withdrawals and began selling assets to return capital. This echoes pre-2008 dynamics, where weak protections and unclear liquidity structures concealed underlying risks.
At the same time, credit performance is deteriorating. Default rates in private credit have risen significantly, and outcomes across managers are diverging. Some funds are adapting, while others are facing steep markdowns, including instances where assets have been written down entirely. The environment is shifting from broad outperformance to one where manager selection is critical.
MSD Capital’s strategy: flexibility and timing
Against this backdrop, MSD Capital, Michael Dell’s family office, is positioned to capitalise on emerging opportunities. Its flexible investment mandate allows it to operate across asset classes without the constraints typical of traditional funds. This enables a focus on deeply analysing cash flows and acquiring assets below intrinsic value.
Chief Investment Officer Alisa Mall has pointed to the growing secondary market as a key area of opportunity. Her approach centres on identifying assets being sold due to liquidity pressures rather than weak fundamentals. In other words, MSD is looking to buy from sellers who need to exit, not those reacting to deteriorating performance.
This aligns with the rapid expansion of private credit secondaries, where transaction volumes have surged, providing a mechanism for liquidity and price discovery. The increase in both LP-led and GP-led transactions is creating a broader pool of opportunities for long-term, patient capital.
Financial impact: rising losses and repricing
The stress in the market is translating into tangible financial consequences. Sharp asset markdowns are becoming more common, highlighting both volatility and limited transparency in private credit. At the same time, default expectations are rising, with forecasts pointing to continued pressure in the coming years as the asset class matures and sector-specific risks play out.
Liquidity risk and market transition
The central risk remains a loss of confidence. If investors continue to withdraw capital, it could trigger forced selling, further price declines, and a feedback loop that amplifies stress. However, current evidence suggests a contained adjustment rather than a full-scale crisis. The pressure is concentrated in certain areas, and the market is adapting through tools like secondary transactions and improved liquidity management.
Private credit is now transitioning into a more mature and competitive space. The era of easy, consistent returns is fading, replaced by a landscape where dispersion, selectivity, and discipline matter more.
What comes next
Several factors will shape the trajectory of the market. The pace of secondary transactions and fund restructurings will indicate whether stress is spreading. Increased involvement from banks, particularly in lending to fund managers, could both support and complicate the system.
For investors like MSD Capital, the current dislocation presents a clear opportunity. Assets are being sold at discounts driven by liquidity needs rather than fundamentals, creating the potential for outsized returns. Success will depend on the ability to distinguish between genuine risk and temporary dislocation, and to deploy capital with patience and precision.
