Jeffrey Gundlach, founder and CEO of DoubleLine Capital, warns investors about private credit risks and other risks associated with “making money.”
Billionaire investor Jeffrey Gundlach has warned that cracks are appearing in America’s booming private credit market, calling it the “Wild West” of finance, comparing it to the unregulated CDO market that existed before the 2008 financial crisis.
Gundlach, founder and CEO of DoubleLine Capital and known as the “bond king,” said the shakeout of private credit is no longer theoretical.
“The issue of private credit is starting to become less of a theoretical culling, and some people are going to survive, some people are going to experience problems, and now we’re starting to see things like canaries in the coal mine fall to the bottom of the cage,” Gundlach said. “Make money with Charles Payne” Wednesday.
“It’s like the Wild West, and it starts with the town having a sheriff and things going pretty well. But then as the frontier town grows, more people come in to take advantage of the opportunity,” he continued. “So I think this could be a problem.”
Mr. Gundlach’s comments came on the same day that Blue Owl Capital Corp. withdrew its plans to merge two private credit funds. “Current market conditions” In an investor statement. The company said the decision reflected market volatility. OBDC stock rose on the news, but Blue Owl’s parent stock fell slightly.
private credit is It is money that investors and funds lend directly to companies, as opposed to banks, and is a multi-trillion dollar market. These funds pool money from pension funds, insurance companies, and wealthy investors and often make loans at higher interest rates than traditional bonds or bank loans.
Traders work on the floor of the New York Stock Exchange during morning trading on November 19, 2025 in New York City. (Getty Images)
Because these transactions occur privately, there is no open market price, there is less regulation, less transparency, and less liquidity. Experts like Gundlach warn that the lack of transparency and liquidity that makes private credit attractive in good times can become dangerous in a downturn.
“We saw one deal called Renovo, where, frankly, a well-respected company marked a bond at 100 cents on the dollar. And a month later, they revised the mark to zero. 100 to zero is a pretty big change,” he noted.
Jeffrey Gundlach, the “bond king” and founder of DoubleLine Capital, analyzes the state of the national debt crisis and discusses “how to make money,” including whether there is an “AI bubble.”
“It’s starting to become clear that this is the problem I’ve been referring to…that, frankly, private credit and private equity are borrowing from private equity. It’s being sold primarily on the volatility argument,” Gundlach added. “Maybe there’s some excess return on illiquidity, but it’s primarily an argument about volatility.”
Gundlach warned that illiquidity could turn paper losses into real losses, pointing to the kind of liquidity squeeze that exacerbated the 2008 financial crisis when investors were unable to meet capital calls.
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Mike Green, portfolio manager at Simply Asset Management, analyzes the current state of the market on how to make money.
“In the market you’re in, the price is estimated, but you don’t know it,” he says. “When people are scared, they don’t want to put themselves in illiquid assets.”
“So, you say you’re going to invest in a fund, and the sponsor is right and responsible and saying we’re going to wait for it to go cheap… and when it goes cheap, we’re going to take your capital out. Everybody thinks it’s cheap now because it probably is. And then the capital calls start coming in and these entities can’t fund it. And I think here we have a mismatch on the capital side, especially in a period of some degree of stress and that liquidity, a large pool of assets and a need. ”
