Cracks in the US private credit industry are widening: The US Business Development Companies Index is down to 424 points, the lowest since the 2022 bear market low. This index tracks publicly traded firms that lend to small, mid-sized, and distressed US businesses, offering retail investors access to private credit markets. The index has declined -150 points, or -25%, over the last year. This comes as Blue Owl Capital permanently halted investor redemptions at its retail private credit fund, OBDC II, on Wednesday. Shares of Blue Owl dropped -10% on Thursday and triggered a broad selloff across private credit stocks. Blue Owl shares have plummeted almost -60% over the last 13 months, even as the firm's revenue continued to grow during the same period. The selloff spread across the sector, with Ares, Apollo, KKR, Blackstone, and TPG all down -15% to -40% year-to-date. Private credit market is on edge.(The Kobeissi Letter)