Blue Owl’s James Clarke on Private Credit Outlook

Summary

James Clarke of Blue Owl Capital discusses the private credit and private markets outlook, arguing private assets offer diversification and downside protection. He says U.S. private lending remains attractive, especially in the upper middle market, while Europe offers sale-leaseback opportunities. He also highlights Australia's fast-growing alternatives market and consolidation toward large long-term managers.

• Blue Owl sees private markets as a portfolio diversifier, not a substitute for public markets.
• Recent bankruptcies were described as bank deals rather than private-market loans, and upper-middle-market default rates have declined.
• The U.S. remains attractive due to a relatively strong economy, returning tax credits, and prior and potential rate cuts.
• European sale-leaseback and triple-net-lease deals are highlighted as a specific opportunity.
• Australia is a fast-growing alternatives market aided by compulsory savings and rising private-market allocations.
• Fundraising is consolidating toward large managers that can offer long-term partnerships and portfolio solutions.
• Geopolitical and tariff risks are acknowledged, but long-duration institutional allocations remain focused on diversification.