The global financial system is currently navigating a period of (at best) structural realignment, following the meteoric rise of private credit as a primary source of corporate and specialised finance. 

Historically a niche alternative to the broadly syndicated loan and high-yield bond markets, private credit has evolved into a $2.1 trillion asset class as of 2025, driven by a decade of traditional bank retrenchment and a relentless search for yield among institutional and, increasingly, retail investors. However, as the market journeys through 2026, a combination of geopolitical uncertainty, macroeconomic volatility, liquidity mismatches, and a looming maturity wall has sparked significant concerns regarding the sustainability of this growth and the systemic implications for borrower sectors, most notably the high-profile landscape of the English Premier League.

Core concerns in the private credit market

The anxieties surrounding the private credit market are not merely a reaction to current economic headlines but are rooted in deep-seated structural shifts that have occurred since the global financial crisis. As the asset class has matured, a boogeyman narrative has gained traction, primarily focusing on the lack of transparency and the potential for un-recognised risks to accumulate in the shadows of the financial system.

Information and transparency gap

Unlike public debt markets, where financial disclosures are standardised and frequent, private credit operates within a bespoke, opaque environment. This transparency gap is at the heart of current regulatory and investor concerns. While the market was small, this opacity was a manageable idiosyncratic risk; however, at its current systemic scale, the inability of market participants to benchmark risk or evaluate the true health of borrower balance sheets creates a dangerous information asymmetry. 

Regulators have noted that as private credit managers provide increasingly larger loans to complex entities, the data required for a holistic risk assessment remains largely unavailable or inconsistent. This lack of visibility complicates the evaluation of how the market might react to a severe or prolonged economic downturn, a test it has yet to face at its current scale.

Valuation integrity

A significant point of contention involves the valuation of private credit assets. Because these loans are not traded on public exchanges, they are typically valued using internal models or third-party valuation providers rather than market-clearing prices. Critics argue that these valuations may lag behind economic reality, particularly in a shifting interest rate environment. If an asset is marked at par one quarter but faces a significant credit event the next, such as the loss of a key customer or a sharp decline in EBITDA, questions arise as to whether the prior mark was fundamentally flawed or if the market simply lacks the mechanism to reflect real-time stress. 

This concern is amplified by the observation that while public credit spreads may fluctuate wildly based on market sentiment, private credit marks often appear remarkably stable, leading to suspicions of volatility dampening that could mask underlying fundamental deterioration.

Erosion of protective covenants

Competition for high-quality deals has led to a noticeable decline in lender protections. 

The transition toward covenant-lite lending, once confined to the broadly syndicated loan market, has permeated private credit. In 2010, less than 10% of new leveraged lending was covenant-lite; by 2020, that figure exceeded 80%. 

Within the private credit sector specifically, the share of loans containing leverage-only covenants dropped from 76.8% in 2023 to just 43.9% in the first half of 2025. Similarly, loans featuring both leverage and interest coverage covenants fell from 45% to 23.5% over the same period. This erosion of protections limits a lender’s ability to intervene early when a borrower’s performance falters, potentially increasing the severity of losses during a default cycle.

Rise of liability management exercises

While headline default rates in private credit have historically remained low, hovering around 2.4% in early 2025, market analysts are increasingly looking at liability management exercises as a more accurate measure of stress. These manoeuvres include distressed exchanges, up-tiering transactions (where certain lenders are prioritised over others), and drop-down financings (where valuable assets are moved to new subsidiaries to collateralise new debt). 

Such activities do not necessarily appear as formal defaults in traditional reporting, yet they represent a significant reshuffling of value that often penalises original lenders. When these selective defaults and LMEs are accounted for, some estimates suggest the true default rate in certain segments of the market may approach 5%.

Liquidity dynamics: Institutional foundations and role of retail investors

The question of where liquidity originates in the private credit market is central to understanding its current volatility. The market is supported by a split base of capital: long-term institutional more-sticky money and a new, more sensitive frontier of retail capital.

Traditional institutional investors continue to be the primary source of liquidity. As of 2025, approximately 94% of institutional investors have an allocation to private credit, viewing it as a reliable source of floating-rate yield and a shock absorber against public market volatility. 

Insurance companies, in particular, have become aggressive participants, seeking to match long-term liabilities with the predictable cash flows of private debt while optimising their regulatory capital charges. Furthermore, approximately 70% of limited partners surveyed in late 2025 indicated that they expected private credit performance to remain consistent or improve in the year ahead, reflecting a resilient, if cautious, institutional sentiment.

Retail trend

The most significant shift in liquidity has been the democratisation of private credit through the wealth management channel. Retail investors, seeking alternatives to stock markets and low-yielding traditional bonds, have flooded into semi-liquid vehicles, such as non-traded Business Development Companies and interval funds. These evergreen structures now command nearly a third of the $1.8 trillion US direct lending market. As of mid-2025, assets in evergreen private credit funds reached $644 billion, a 45% increase year-over-year.

However, this retail capital is inherently more sensitive to negative news cycles than institutional capital. Unlike institutional LPs, who commit capital for 7–10 years, retail investors in semi-liquid funds expect a degree of liquidity, typically via quarterly redemption offers. When market sentiment sours, as it did in late 2025 following reports of rising defaults in the automotive and tech sectors, this retail liquidity can quickly turn into a redemption surge, testing the structural limits of the funds.

Redemption rates 

The semi-liquid label of many modern private credit funds is currently facing a critical reality check. The structure of these funds, primarily BDCs, usually limits redemptions to 5% of the fund’s total Net Asset Value (NAV) per quarter (or approximately 2% per month). These caps exist specifically to prevent a run on the bank scenario and to ensure managers are not forced to sell illiquid loans at a discount during periods of stress.

In the first quarter of 2026, the private credit industry witnessed a record-breaking volume of withdrawal requests. Across the non-traded BDC sector, redemption demand reached historic highs, with several flagship funds receiving requests for more than double their quarterly caps. This resulted in proration, a process where the fund honours only a portion of each investor’s request to stay within the 5% limit.

This surge in redemptions has been described as a mini doom loop. Alarmed by individual corporate bankruptcies and warnings from industry leaders like Jamie Dimon, investors rush to withdraw capital. The resulting gating or proration then triggers further concern about the liquidity of the asset class, potentially leading to more redemption requests in subsequent quarters. Industry experts argue that while redemptions are high, they do not constitute a solvency crisis; rather, they are a reflection of profit-taking after three years of outperformance and a natural technical reaction to the first true period of market stress for many retail participants.

Ares, Apollo, and MSD Capital

Followers of my analysis of private credit in football will be familiar with the names above. 

To understand how the market is fairing, it is necessary to examine the performance and strategic positioning of the industry’s titans. Ares, Apollo, and MSD Capital (now BDT & MSD Partners) represent different types of the private credit evolution, yet all are currently navigating the same turbulent waters.

Ares Management: Navigating scale and redemption pressure

Ares Management has cemented its position as a global credit leader, managing $406.9 billion in credit assets as of December 31, 2025, within a broader $622.5 billion platform. The firm’s growth has been extraordinary, with a 10-year AUM compound annual growth rate (CAGR) of 21%. In 2025 alone, Ares raised $113.2 billion in new capital and invested $145.8 billion globally.

Despite this formidable scale, Ares’ flagship retail vehicle, the Ares Strategic Income Fund has not been immune to the broader market jitters. 

In Q1 2026, the fund received redemption requests for 11.6% of its shares, nearly $1.2 billion, but fulfilled only $524.5 million to maintain its 5% structural cap. Ares has emphasised that the majority of these requests came from a limited number of family offices and smaller institutions in specific geographies, representing less than 1% of the fund’s 20,000 shareholders. 

Financially, while Ares reported strong fee-related earnings of $527.7 million in Q4 2025, it missed some analyst revenue forecasts, leading to a temporary 4.9% dip in its stock price. However, the firm maintains a defensive bias, with loan-to-value ratios near historical lows in the 40% range and zero loans on non-accrual status in the ASIF portfolio as of early 2026.

Apollo Global Management: Asset-light and investment grade

Apollo has adopted a strategy centered on asset-light models and the integration of retirement services through Athene. As of the end of 2025, Apollo managed approximately $938 billion in AUM, with a record $225 billion in inflows during the year. The firm has been a pioneer in co-opetition with traditional banks, notably its $25 billion partnership with Citigroup, which allows Apollo to provide private credit solutions while banks maintain their client relationships and offload regulatory risk.

Apollo’s flagship non-traded BDC, Apollo Debt Solutions, faced a similar liquidity challenge to Ares in Q1 2026. Redemption requests reached 11.2% of its $14.7 billion in net assets, forcing the firm to prorate at the 5% cap. Apollo has sought to reassure investors by pointing to a weighted average interest coverage ratio of 2.5x—a 15% improvement year-over-year, and a low reliance on payment-in-kind (PIK) instruments, which account for only 2.5% of investment income. The firm enters 2026 with a massive $309 billion origination engine, focused on investment-grade credit and specialised asset-based finance (ABF).

BDT & MSD Partners: A merchant banking approach

MSD Capital, the personal investment vehicle of Michael Dell, underwent a strategic merger in early 2023 with Byron Trott’s BDT & Company, creating BDT & MSD Partners. This firm operates more as a merchant bank than a traditional asset manager, with $50 billion in AUM and a high-yield, secured lending model.

The firm’s credit platform, valued at over $15 billion, is characterised by its aggressive focus on seniority. Its affiliated public vehicle, MSD Investment Corp, reports that 96.9% of its $4.9 billion portfolio consists of senior secured first-lien loans. This conservative positioning has served it well; as of 1Q 2025, only 0.1% of its portfolio (at fair value) was on non-accrual status. 

BDT & MSD Partners has been a first mover in the sports sector, using its flexibility to provide opportunistic, asset-backed debt to European football clubs where traditional bank financing is unavailable. However, the firm has faced scrutiny regarding potential conflicts of interest, specifically involving Robert Platek, the firm’s Global Head of Credit, who also manages a private portfolio of football clubs that may compete with the clubs to which MSD has lent money.

Private credit’s impact on the English Premier League

The English Premier League (EPL) has become a primary beneficiary, and potentially a primary victim, of the private credit boom. As traditional global banks retreated from football during the pandemic, large US alternative asset managers stepped in, transforming the financial architecture of the beautiful game.

Evolution of football financing

For elite clubs, the move toward private credit was driven by the need for bespoke, flexible capital that could support massive infrastructure projects and bridge the cash flow gaps caused by the transfer market. By the close of 2023, over 35% of European football clubs were funded via private capital. This financing typically takes four forms:

1. US Private Placements: Long-term, low-cost institutional debt typically reserved for clubs with investment-grade ratings. Tottenham Hotspur raised $659 million through this route to finance its new stadium, achieving a 2.66% weighted average coupon with maturities stretching as far as 2051.
2. Structured Private Capital: Hybrid debt-like preferred equity used for regulatory compliance and major capital projects. Chelsea FC’s $500 million injection from Ares is the most prominent example.
3. Factoring: Selling future transfer receivables or broadcast revenue for short-term liquidity. This is a common tool for mid-table and smaller clubs to fund player trading.
4. Direct Senior Loans: High-interest, short-term debt for operational spending or refinancing. Nottingham Forest’s £80 million loan from Apollo, carrying an 8.75% interest rate, highlights the cost of this liquidity for clubs with higher risk profiles.

Club exposure and renegotiation timelines

The reliance on private credit has created a maturity wall within football that mirrors the broader corporate market. Several high-profile clubs face significant financial milestones in the next 24 months.

Chelsea FC and the Ares PIK Debt

Chelsea, controlled by the BlueCo consortium, secured a $500 million facility from Ares Management structured as redeemable preferred equity. This behaves like debt but sits in a unique position on the balance sheet, potentially aiding the club’s compliance with spending rules. However, it carries an estimated 12% Payment-In-Kind (PIK) interest rate. PIK interest is not paid in cash but is instead added to the principal of the loan, leading to exponential debt growth if not refinanced. 

The long-term impact of this expensive capital will depend on Chelsea’s ability to return to the Champions League and monetise its multi-club ownership model.

Nottingham Forest and Apollo

In July 2025, it was revealed that Apollo Global Management provided an £80 million loan to Nottingham Forest. This three-year term loan (maturing in late 2027 or early 2028) was used primarily to refinance an existing facility from Rights and Media Funding Group and to provide £25 million in working capital. The debt is secured against the club’s assets, including its historic City Ground stadium. Given the high interest rate of 8.75%, the club will likely seek to renegotiate or refinance this debt as it moves toward the end of its current three-year cycle, especially if market rates decline.

Southampton FC and MSD 

Southampton FC, owned by Sport Republic, took a £78.8 million loan from MSD (BDT & MSD Partners). The loan, which carries a 9.14% interest rate, is secured by a mortgage on St Mary’s Stadium and the club’s training ground. Following a period of relegation and subsequent promotion, the club has had to be a net seller in the transfer market, generating over £123 million in disposal profits in the 2023/24 season alone to stabilise its core operations and meet its upcoming debt obligations.

Everton FC and the Friedkin restructuring

Everton has been the epicentre of football finance stress, having faced multiple points deductions for breaching spending rules. However, the acquisition by The Friedkin Group (TFG) in late 2024 has led to a comprehensive rescue operation. TFG recapitalised the business, converting £451 million in shareholder debt into equity and replacing high-interest stadium construction loans (which were as high as 12%) with more favorable long-term senior secured notes through JP Morgan Chase. While the club’s stadium debt is still significant, with £340.9 million payable after five years, the refinancing has significantly improved the club’s debt-to-equity ratio and sustainability outlook.

Manchester United and the legacy LBO debt

Manchester United’s total debt reached £1.3 billion ($1.75 billion) at the end of 2025, largely composed of legacy debt from the Glazer family’s leveraged buyout and subsequent credit facility drawdowns. The club paid £13.9 million in interest during a single quarter in late 2025. While revenues are projected to reach record levels of over £640 million, the high cost of debt service and the need to fund stadium redevelopment make the club’s financial position sensitive to its performance in European competitions.

The regulatory horizon: SCR, SSR, and the future of funding

The Premier League is currently transitioning away from its Profitability and Sustainability Rules (PSR) toward a new “Squad Cost Ratio” (SCR) framework, starting in the 2026/27 season. This shift is not merely a change in accounting but will fundamentally alter the debt capacity of many clubs.

The mechanics of SCR and SSR

The SCR system limits a club’s on-pitch spending, including player and coach wages, transfer amortisation, and agent fees, to 85% of its football-related revenue and net profit from player sales. For clubs competing in UEFA competitions, this limit is tighter at 70%.

Crucially, the new framework includes a Sustainability and Systemic Resilience requirement which introduces a positive equity test. Starting in 2026/27, clubs must demonstrate that their liabilities-to-adjusted-assets ratio does not exceed 90%, a threshold that tightens to 80% by 2028/29. This is specifically designed to prevent clubs from permanently operating at high levels of leverage provided by private credit or owner loans.

Implications for private credit exposure

The implementation of SCR will likely have several second-order effects on the funding of EPL clubs:

1. Forced deleveraging: Clubs with high levels of debt-to-equity (such as those reliant on PIK debt or large asset-backed loans) may be forced to convert debt to equity or sell players to meet the Positive Equity Test.
2. Asset sale restrictions: New rules prevent the sale of capital assets (like training grounds or hotels) to related parties to boost revenue for spending controls, closing a loophole that highly leveraged clubs previously used to manage PSR compliance.
3. Greater demand for hybrid solutions: As the Positive Equity Test becomes more stringent, clubs will likely pivot away from traditional senior loans toward hybrid capital and minority equity investments (like Liverpool’s deal with Dynasty Equity) to improve their balance sheets without the full cost of high-interest debt.

Systemic outlook: 2026 maturity wall

Beyond the confines of the football pitch, the broader private credit market is rapidly approaching a maturity wall.  Approximately $875 billion in commercial mortgage debt and over $620 billion in high-yield bonds and loans are scheduled to mature in 2026. For many companies, and clubs, that took on debt in the ultra-low interest rate environment of 2021, the cost of refinancing in 2026 will be significantly higher.

The private credit market is entering a divisive phase. Managers with the resources to steward troubled credits through restructuring and those who have maintained underwriting discipline will likely survive and thrive. However, those who leaned into the golden age by loosening covenants and aggressively deploying capital into vulnerable sectors (like software or consumer services) may find themselves struggling with high non-accruals and sustained redemption pressure.

For the English Premier League, the 2025-2029 media rights cycle represents a definitive end to the era of explosive domestic growth, with annual values remaining essentially flat. This stagnation, combined with the new SCR rules and the 2026 maturity wall, suggests that the easy money era of private credit in football is coming to an end. Clubs will be forced to move toward more sustainable, equity-heavy capital structures, and the shadow banking system of inter-club transfer debt will face its first major liquidity test as clubs prioritise de-leveraging over aggressive expansion.

Synthesis and strategic conclusions

The concerns currently permeating the US private credit market are symptomatic of a maturing asset class facing its first true interest rate cycle since the global financial crisis. While fears of a systemic doomsday scenario may be overstated, given that private credit AUM represents only about 9% of total corporate borrowing and leverage within fund vehicles remains limited to roughly 1:1, the technical stress of 2026 is undeniable.

The major sources of liquidity are shifting. While institutional capital remains the core, the emergence of the retail wealth channel has introduced a new layer of volatility, as evidenced by the Q1 2026 redemption surge and the subsequent proration in flagship funds like Ares’ ASIF and Apollo’s ADS. This liquidity sensitivity is forcing a greater focus on transparency and standardised benchmarking, which will ultimately benefit the asset class but may cause significant short-term pain for weaker players.

In the world of elite sports, private credit has permanently altered the landscape of ownership and club infrastructure. However, the high-interest, asset-backed model pioneered by firms like BDT & MSD Partners and Apollo is now hitting a regulatory and economic ceiling. As the Premier League’s new SCR framework takes hold, clubs must transition from aggressive, debt-fueled growth to a more disciplined, ratio-based financial existence. The clubs most exposed, Chelsea, West Ham United, Nottingham Forest, and Southampton for example, face critical refinancing and repayment windows in 2025 and 2026 that will determine their long-term competitive viability.

The private credit market in 2030 will look materially different from that of 2020. It will be more regulated, more transparent, and more integrated into the broader capital markets. For now, investors and club owners alike must navigate the 2026 maturity wall with caution, as the golden age of unchecked expansion gives way to a new era of discipline, restructuring, and strategic capital management.