Gabriel Yomi Dabiri and Cynthia Weiss
Global Private Credit & Direct Lending
The collapse of First Brands Group, the parallel collapse of Market Financial Solutions in the UK and recent redemption calls at some of the largest players in the private credit market have placed the US$1.8 trillion private credit industry under wide public scrutiny for perhaps the first time in the asset class’s phenomenal rise since the global financial crisis of 2008 (GFC).
As of mid-March 2026, several large private credit funds faced unprecedented redemption pressure, and JPMorgan has reportedly marked down collateral on software loans in private credit financing facilities, tightening the availability of funding to private credit lenders.
However, instead of portending doom for the asset class, these events should instead be seen as a market correction that can fortify the foundations of private credit, thereby allowing not just for continued growth, but for healthier and more sustainable growth.
This Q&A alert examines the structural fault lines and legal risks that underlay the disruptions described above, and explores specific steps that private credit funds, private equity sponsors and banks should be taking now to navigate this market correction.
