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Mohamed El-Erian flags risks after Blue Owl Capital halts redemptions in retail private credit fundMohamed El-Erian questioned whether Blue Owl’s move to permanently restrict redemptions signals broader stress in private credit, warning of possible valuation hits in advanced markets.By CNBCTV18.com February 19, 2026, 5:33:47 PM IST (Published)2 Min ReadEconomist Mohamed El-Erian on Thursday raised concerns over potential stress in private credit markets after reports that US-based asset manager Blue Owl has permanently restricted investor redemptions from a retail-focused private debt fund.

Reacting to a Financial Times headline that read, “Blue Owl permanently halts redemptions at private credit fund aimed at retail investors,” El-Erian questioned whether the development could represent a broader warning sign.

“Is this a ‘canary-in-the-coalmine’ moment, similar to August 2007?” he wrote on X, referring to early signs of strain that preceded the 2008 Global Financial Crisis.

He said the development would likely be on the minds of investors and policymakers as they assess potential risks in advanced economies, particularly in segments where private credit has expanded rapidly in recent years.

El-Erian suggested that parts of the private credit boom in developed markets may have gone “too far overall,” while noting that firms differ significantly in structure and risk management. However, he cautioned that the sector could still face what economists describe as a “market for lemons” problem — where weaker assets become harder to distinguish from stronger ones during periods of stress.

He also pointed to what he called the “elephant in the room” — the possibility of valuation adjustments in certain asset classes. While he clarified that current risks are “nowhere near” the scale of those that triggered the 2008 crisis, he said a “significant — and necessary — valuation hit” could be looming for some assets.

Private credit markets have grown sharply over the past decade, increasingly attracting retail investors through semi-liquid fund structures. Analysts say redemption restrictions, while often built into such vehicles, can test investor confidence during periods of tighter liquidity.

El-Erian said he would share more thoughts on the issue in due course.Continue ReadingTags2008 financial crisis