--- title: Private Credit Is Breaking. Your Deals Are About to Get Expensive, Or Well, RIP description: Private credit crisis forcing fund managers to pay massive premiums. Visual invoice breakdown showing rising rates, tighter covenants, reduced capital, and cascading MOIC damage. image: https://blog.lpblueprint.com/hubfs/AI-Generated%20Media/Images/The%20Exterminators%20BillSplitscreen%20comparison%20Left%20side%20A%20pristine%20confident%20fund%20manager%20closing%20deals%20with%20cheap%20debt%20and%20loose%20terms%20Right%20side%20Same.png --- [Skip to content](https://blog.lpblueprint.com/blog/private-credit-is-breaking.-your-deals-are-about-to-get-expensive-or-well-rip#main-content) - [Insights](https://blog.lpblueprint.com/blog) - [About/Contact Us](https://blog.lpblueprint.com/blog/private-credit-is-breaking.-your-deals-are-about-to-get-expensive-or-well-rip#contact) Open main navigation Close main navigation - [Insights](https://blog.lpblueprint.com/blog) - [About/Contact Us](https://blog.lpblueprint.com/blog/private-credit-is-breaking.-your-deals-are-about-to-get-expensive-or-well-rip#contact) - [Contact us](https://blog.lpblueprint.com/blog/private-credit-is-breaking.-your-deals-are-about-to-get-expensive-or-well-rip#contact) [Contact us](https://blog.lpblueprint.com/blog/private-credit-is-breaking.-your-deals-are-about-to-get-expensive-or-well-rip#contact) Nov 19, 2025, 9:10:29 AM # Private Credit Is Breaking. Your Deals Are About to Get Expensive, Or Well, RIP [Adam Metz](https://blog.lpblueprint.com/blog/author/adam-metz) Share: [facebook-f icon](http://www.facebook.com/share.php?u=https://blog.lpblueprint.com/blog/private-credit-is-breaking.-your-deals-are-about-to-get-expensive-or-well-rip) [linkedin-in icon](http://www.linkedin.com/shareArticle?mini=true&url=https://blog.lpblueprint.com/blog/private-credit-is-breaking.-your-deals-are-about-to-get-expensive-or-well-rip) [Twitter icon](https://twitter.com/intent/tweet?url=https://blog.lpblueprint.com/blog/private-credit-is-breaking.-your-deals-are-about-to-get-expensive-or-well-rip) [pinterest-p icon](http://pinterest.com/pin/create/link/?url=https://blog.lpblueprint.com/blog/private-credit-is-breaking.-your-deals-are-about-to-get-expensive-or-well-rip) [envelope icon](mailto:?body=https://blog.lpblueprint.com/blog/private-credit-is-breaking.-your-deals-are-about-to-get-expensive-or-well-rip) This isn't theoretical. This is like [*12 hours ago*.](https://www.bloomberg.com/opinion/newsletters/2025-11-19/dimon-cockroaches-are-living-in-risk-markets-heads)Bloomberg just ran "Private Extermination," and it's s\*\*t news for GPs planning to raise capital or close deals in the next 12-18 months. Jamie Dimon flagged hidden defaults in private credit after Tricolor and First Brands collapsed. The feds are criminally investigating fraud at private credit borrowers. Blue Owl merged two funds, effectively converting an open-ended fund into a closed-end vehicle while shares traded at a 20% discount to NAV. The move triggered investor backlash and potential investigations. More than half of global fund managers now believe private credit is the most likely source of a major credit event. Confidence is collapsing. --- ### What This Means for Your Deals: Rates spike (8-9% instead of 6.5%). Terms tighten (strict debt caps, mandatory prepayment triggers, no dividends). Capital dries up ($50M debt raises get $35M instead). Portfolio companies already financed with private credit face covenant stress. Meanwhile, LPs are spooked after Blue Owl proved "liquid" private assets can lock investors in with losses. ---   ### Here's the Real Question: How Much Is Your Fundraising Problem Actually Costing You? Most GPs have no idea. They see slow fundraising as "inconvenient". They don't see the cascading damage to MOIC and IRR. #### Start here:[Fund Manager Diagnostic](https://tinyurl.com/fmdiag) This diagnostic quantifies *exactly* how much money you're leaving on the table every month from capital formation problems. It calculates the MOIC and IRR damage caused by slow fundraising and deployment delays. Most GPs discover they're losing 8-15% of fund returns *just* from fundraising inefficiency. In a contracting market, that's the difference between a 1.5x and a 1.8x fund. You can't fix what you don't measure. Run it. Get the real number. --- ### But Do You Know Your True Fundraising Power? Not all partners are equal. Some actually raise capital. Others just show up to meetings. Use the [GP Velocity](https://www.lpblueprint.com/gpvelocity) diagnostic to to calculate, on a per-partner basis, exactly how much each True Partner (carry, control, commitment) is actually raising. You might think you have five rainmakers. What you find is one real fundraiser and four people cosplaying. More importantly: It tells you what your True Partner velocity *should be* to hit your target. Raising a $250M fund with three True Partners? You need each pulling $83M. If one is pulling $30M, you've got a real problem—and you need to know it *now*, not at year-end when you're scrambling. This forces the partnership conversation you've been avoiding. --- ### How Do You Actually Stack Up Against Peers? Stop guessing. Stop running outdated benchmarks. Check [See Where Your](https://app.lpblueprint.com/vcblueprint)[VC Fund Stands,](https://app.lpblueprint.com/vcblueprint)our latest benchmark showing exactly where your fund ranks across VC, PE, growth equity, credit, infrastructure, and hedge. It's specific to your strategy, vintage year, and fund size. Are you raising at velocity or behind? Are you destroying LP confidence? This is the reality check that separates denial from action. --- ### Your Action Plan: 1. Run the[Fund Manager Diagnostic](https://tinyurl.com/fmdiag) and quantify what your fundraising problems are *actually* costing you in MOIC and IRR. 2. Run[GP Velocity](https://www.lpblueprint.com/gpvelocity) and identify who your real fundraisers are. Get clarity on whether you can hit your target with your current partnership structure. 3. Check[VC Fund Stands](https://app.lpblueprint.com/vcblueprint) and see where you actually rank against peers who are executing capital formation well. 4. Stress-test every deal assuming rates 150-200 basis points ***higher*** and less debt available. Pre-negotiate debt terms ***before*** signing LOIs. 5. Audit covenant compliance on portcos already financed with private credit. If you're close to a breach, refi *today*. 6. Get real with LPs. Stop selling rosy projections. Be transparent about private credit exposure. Walk them through realistic scenarios, including downside cases. --- ### The Brutal Truth Private credit enabled a decade of aggressive PE growth. That era is over. The market is recognizing that much of that growth was built on reckless underwriting and cheap leverage. The GPs who adapted *yesterday* will raise capital at reasonable economics. The ones adapting *today* will struggle. The ones still in denial? Damn, they're gonna get crushed. The ones who *measure* their capital formation problems, *understand* their true fundraising power, and *benchmark* against reality will make the strategic decisions that save their funds. Get your GPs into these diagnostics. Get them the data. Then help them act on it. [playbook](https://blog.lpblueprint.com/blog/tag/playbook), [private credit](https://blog.lpblueprint.com/blog/tag/private-credit), [diagnostic](https://blog.lpblueprint.com/blog/tag/diagnostic) ## Related posts [![](https://blog.lpblueprint.com/hs-fs/hubfs/Imported_Blog_Media/66623f718236cf62dffa39f0_mathieu-stern-1zO4O3Z0UJA-unsplash.jpg?height=200&name=66623f718236cf62dffa39f0_mathieu-stern-1zO4O3Z0UJA-unsplash.jpg)](https://blog.lpblueprint.com/blog/navigating-the-lp-landscape-insights-on-dry-powder-deal-activity-and-market-dynamics?hsLang=en) [Investing](https://blog.lpblueprint.com/blog/tag/investing) ## [Navigating the LP Landscape: Insights on Dry Powder, Deal Activity, and Market Dynamics](https://blog.lpblueprint.com/blog/navigating-the-lp-landscape-insights-on-dry-powder-deal-activity-and-market-dynamics?hsLang=en) [Adam Metz](https://blog.lpblueprint.com/blog/author/adam-metz) Sep 24, 2023, 1:11:27 PM I ran into investor Jason Calacanis from the All-In Pod a few weeks ago at a video game arcade here... [Read more](https://blog.lpblueprint.com/blog/navigating-the-lp-landscape-insights-on-dry-powder-deal-activity-and-market-dynamics?hsLang=en) [![](https://blog.lpblueprint.com/hs-fs/hubfs/Imported_Blog_Media/666387d72a539c24cf71135f_sean-pollock-PhYq704ffdA-unsplash.jpg?height=200&name=666387d72a539c24cf71135f_sean-pollock-PhYq704ffdA-unsplash.jpg)](https://blog.lpblueprint.com/blog/cap-rates-in-commercial-real-estate-the-challenges-non-silicon-valley-funds-face-in-2024?hsLang=en) [Business](https://blog.lpblueprint.com/blog/tag/business) ## [Cap Rates in Commercial Real Estate & The Challenges Non-Silicon Valley Funds Face in 2024](https://blog.lpblueprint.com/blog/cap-rates-in-commercial-real-estate-the-challenges-non-silicon-valley-funds-face-in-2024?hsLang=en) [Adam Metz](https://blog.lpblueprint.com/blog/author/adam-metz) Sep 24, 2023, 1:11:27 PM Cap Rates in Commercial Real Estate & The Challenges Non-Silicon Valley Funds Face in 2024 ‍ Cap... [Read more](https://blog.lpblueprint.com/blog/cap-rates-in-commercial-real-estate-the-challenges-non-silicon-valley-funds-face-in-2024?hsLang=en) [![](https://blog.lpblueprint.com/hs-fs/hubfs/evelyn-verdin-7aVp13gLZbE-unsplash.jpg?height=200&name=evelyn-verdin-7aVp13gLZbE-unsplash.jpg)](https://blog.lpblueprint.com/blog/who-actually-uses-506-c-and-who-doesn-t?hsLang=en) [Finance](https://blog.lpblueprint.com/blog/tag/finance), [Business](https://blog.lpblueprint.com/blog/tag/business), [fundraising](https://blog.lpblueprint.com/blog/tag/fundraising), [506c](https://blog.lpblueprint.com/blog/tag/506c) ## [Who Actually Uses 506(c), and Who Doesn’t](https://blog.lpblueprint.com/blog/who-actually-uses-506-c-and-who-doesn-t?hsLang=en) [Adam Metz](https://blog.lpblueprint.com/blog/author/adam-metz) Oct 22, 2025, 9:02:57 AM Since 2020, nearly all private funds - venture, private equity, credit, infrastructure, hedge -... [Read more](https://blog.lpblueprint.com/blog/who-actually-uses-506-c-and-who-doesn-t?hsLang=en) [linkedin-in icon](https://www.linkedin.com/company/lpblueprint) [Twitter icon](https://x.com/lpblueprint) --- ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Adam Metz", "url" : "https://blog.lpblueprint.com/blog/author/adam-metz" }, "dateModified" : "2025-11-19T17:10:29.867Z", "datePublished" : "2025-11-19T17:10:29.000Z", "headline" : "Private Credit Is Breaking. 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