BlackRock Just Had ANOTHER Fund COLLAPSE

追加: 2026-05-24

[00:00:00]BlackRock are under investigation for fraud by the Department of Justice for their blatantly fake valuation practices of their private credit funds after months of speculation that they are lying to their investors and burying bad news to try and stop their disastrous private credit funds from collapsing after a huge 13 billion US dollar acquisition they made just about a year ago to break into private credit. State Street have been exposed as handing off their private credit funds to a Texas education fund meaning Texan taxpayers are basically funding an invisible bailout of the dying sector without even knowing about it. And Blue Owl Capital, the now infamous asset manager after publicly collapsing over its private credit turmoil, has just sold a 400 million dollar bond at higher than expected yields to try and pay off some of their old debt, which was held at a far lower interest rate. All to be covered today on Stoic Finance with me, your host Max. And if you want to stay up-to-date on the financial news the legacy media won't show you, like and comment under this video so the algorithm shows you my future videos.

[00:01:01]And of course, subscribe to the channel as well. And let's get right into the video.

[00:01:06]Federal prosecutors are scrutinizing valuation practices at a BlackRock private credit fund. The Manhattan US Attorney's Office in recent months has been seeking information about BlackRock TCP Capital, a publicly traded BDC.

[00:01:19]Executives have been questioned as part of the probe. A representative for BlackRock declined to comment. Jay Clayton, who runs the SDNY, said in November he was concerned about how firms value private assets and that people should know that the financial regulators in the department are looking at those. This week, while downplaying concerns about an imminent financial crisis from private credit, Clayton reiterated at a Managed Funds Association conference that if people are mismarking in order to generate fees, that's always been a no-no. It's not exactly clear whether the probe of the BlackRock fund, which trades under the ticker TCPC, is part of the broader Southern District New York inquiry. TCPC filed a rare off-cycle disclosure in January that said it expected to slash the value of its assets by 19% that sent shares of the fund plunging 13% on January the 26th, the most since March 2020 COVID. A number of class action lawsuits have since been filed on behalf of investors that claim it made materially false statements and that it didn't properly value its loans. The portfolio markdown was among the starkest examples of how quickly evaluations can change in the 1.8 trillion US dollar private credit market.

[00:02:34]So, the wolves are closing in on BlackRock in their fraud with regards to their private credit funds and it seems a bunch of other asset managers are probably under the same degree of pressure. They just haven't had details of the investigation into them leaked to the press yet. And it's also very clear that what these firms were doing was illegal. The District Attorney for Southern New York couldn't have been clearer. In fact, if a firm is deliberately inflating the value of their illiquid assets to generate extra fees off their investors, that's always been a no-no was the quote, which I do have to admit is a weird way of saying illegal coming from one of the most senior lawyers in America.

[00:03:11]Now, BlackRock and the rest of the industry know that time is up. So, they're desperately trying to pretend that they're acting in good faith and are accelerating the markdown of their assets after ignoring all of the fundamentals in their portfolios for the last two or so years, which even led to BlackRock marking down the value of its loans by 19% on just a random day in January as opposed to the quarterly basis it's usually done in. Essentially, BlackRock know the feds are looking at them. They know they've been committing fraud and basically stealing from their investors and so they're slashing asset prices in an attempt to show the feds that they are valuing their assets fairly, but it's too little too late.

[00:03:47]The feds are already investigating and hopefully the criminals at the top of this cartel will see jail time, though I can't say I'm particularly optimistic for that outcome.

[00:03:59]The identity of an investor that dramatically boosted assets in State Street's cause, uh, private credit ETF has been revealed as a $60 billion sovereign wealth fund that provides funding to Texan public schools. The Texas Permanent School Fund bought more than 29 million shares totaling about $740 million worth of the State Street IG Public and Private Credit ETF trading under the ticker PRIV. The emergence of a large institutional buyer in such an ETF is a relatively new development as the vehicles have largely been utilized by individual investors and advisors looking for exposure to private credit.

[00:04:35]The Texas fund owns a majority of the shares in the ETF.

[00:04:40]Quote, "We are delighted to have Priv strategy validated by a large asset owner as it has crossed the one-year mark. We believe a combination of proven track record in investor education will pave the way for broader adoption."

[00:04:51]State Street in partnership with Apollo debuted the ETF last year as part of an effort to bring private credit to a broader group of investors in a watershed moment for the $1.8 trillion industry. The ETF offered outsized exposure to the asset class after Apollo agreed to originate a portion of the investments and provide intraday price data. The ETF drew a lackluster response from investors in its initial months, but earlier this year the fund took in a record one-day inflow that brought its assets to $496 million from 100. The Texas fund later invested about another 347 million helping to boost their assets more than $840 million.

[00:05:28]And you can see those moves very, very simply on this graph here which shows the total assets in this fund over time.

[00:05:36]Every single bump you see, and these in particular, is the Texas Permanent Schools Fund. Now, State Street haven't been accused of quite the same degree of mismanagement when it comes to private credit as say BlackRock have, but at the end of the day, all of these BDCs are well diversified amongst a minimum of 20 to 30 different debtors, and they're all falling or failing in unison as it's isn't a BlackRock problem or a KKR problem or State Street problem, it's a private credit problem. Now, the worrying thing here is that in the past, it was just individual investors who are losing money in private credit, but now the failing sector is being offloaded to people who don't even know that they're investors. In particular, we're seeing pension funds for state or federal employees throw huge quantities of money into private credit buying at inflated prices, often not even giving out loans themselves, just buying up the old trash loans that used to be controlled by companies or firms like BlackRock at heavily inflated prices, and basically giving a free taxpayer-funded bailouts to the idiot investors who over invested into private credits in the first place.

[00:06:44]Now, we've already seen this with the Universities of California pension funds where tens of thousands of employees from different universities all over California suddenly had their pensions raided and invested into private credit, and now we're seeing the exact same thing with this Texas fund, which is supposed to be invested for the future of Texan children and their education.

[00:07:05]Again, this fund is paid for by Texan taxpayers, and yet 99% of those taxpayers will have no idea where this money is going, and with the dodgy valuations going on in private credit that's now been validated by the Southern District of New York announcing that they're investigating criminal wrongdoing, we can be almost entirely sure that this investment will turn out badly, and taxpayers will be the ones who pay the price, not the investors who actually created this bubble.

[00:07:34]A Blue Owl Capital private credit fund sold a $400 million US dollar investment grade bond a month after a debt sale to bond giant Pacific helped ease capital access worries. Blue Owl priced five-year notes Monday at a spread of 2.3 points over treasuries, about 0.3 percentage points tighter than initial discussions, according to a person with knowledge of the matter. The fund, known as OCDC, plans to use the proceeds to pay repay existing debt including borrowings under a revolving credit facility and a 3.4% note that matures July the 15th.

[00:08:07]OCDC, a publicly traded BDC that provides direct loans to mostly small and mid-size companies, last month sold $400 million of bonds that were entirely snapped up by Pimco. That deal, which ended a roughly six-week drought of issuance by BDCs, was seen as a vote of confidence for an industry facing concerns over everything from valuations and liquidity to transparency.

[00:08:29]So finally then for today, we have this rather embarrassing update from the failing asset manager Blue Owl, who has been hit harder by the private credit trouble than any of their competitors.

[00:08:39]And this is being spun as a win by Bloomberg and Blue Owl Capital, but the details are actually very worrying. They sold $400 million in corporate bonds to pay off some old debt, which is never a good sign for a company in the first place, but then you look at how the interest rate on the old debt was 3.4%, which is incredibly low and close to free money in today's inflation environment, and you look at the yield on that new debt, which is probably 6 and 1/2 to 7%, and the cost of their debt service has literally doubled from this bond sale.

[00:09:09]Blue Owl are hemorrhaging funds. They're losing investors left, right, and center, and they're incapable of paying off their old low-interest debt without taking out new high-interest debt. So absolutely, Blue Owl Capital are in a far worse position today than they were even just a week or a month ago, and yet we're expected to believe Bloomberg when they say this is a vote of confidence in the private credit space, despite the fact the bond sale was only able to succeed after bumping the yield up an extra 30 basis points higher than Blue Owl had initially floated.

[00:09:41]Now, that's it for today. Very heavy on private credit, and I'll spare you the UK-centric updates just for today. We'll be back on it over the next week as a lot is going on in the UK right now with a leadership election essentially being launched. Now, if there's a specific topic you'd like me to cover tomorrow, leave a comment down below in the description, or if you just want to stay up to date on the uh the financial news the legacy media won't show you, subscribe to this channel, like, and comment under this video so my next video should up for you on the algorithm, or you can join my Substack to see the content I'm not allowed to post on YouTube by clicking the button on screen here. My mission with this channel is to provide the real news the legacy media won't show you, but unfortunately, there are some things I'm just not allowed to say here. And recently, more and more of my videos have been getting demonetized and censored, so I've launched an email newsletter covering the news that I'm not allowed to talk about here. So, if you want to learn the truth about the establishment they don't want you to see, join my Substack by clicking the button on screen right now.