Private Credit Secondaries Hit $226B as Dell Office Targets Discounts

Tumult in private-credit markets may be creating a more selective opportunity set, even as risks build beneath the surface, according to remarks by Alisa Mall, chief investment officer of Michael Dell's family office, at a Bloomberg New Voices event in New York. Mall said recent dislocations could open openings for investors able to navigate complexity, particularly with default rates expected to rise in 2027 and 2028. She pointed to increasing dispersion across the $1.8 trillion market, suggesting outcomes may vary widely and that identifying durable businesses will be central to capturing value in the next phase of the cycle.

The backdrop includes a wave of redemption requests hitting private-credit funds, driven by concerns over lending standards and exposure to companies potentially vulnerable to artificial intelligence disruption. Mall suggested much of the pressure may be sentiment-driven rather than fundamentally driven, highlighting a mismatch between investor liquidity expectations and the structure of the underlying products. As investors seek exits, the secondary market has expanded, with deal volumes reaching a record $226 billion last year, up 41%, according to Evercore. That trend may continue as more sellers emerge.

Dell's family office, DFO Management, appears to be positioning for secondary opportunities, including assets trading below par that it views as fundamentally strong. The firm recently bid on an energy portfolio it described as high-quality exposure but did not secure it. Following Broadcom's (AVGO) acquisition of VMware (VMW), in which Dell (DELL) was a major stakeholder, the family office has been reallocating capital into real estate, infrastructure, energy, and private credit. It has already deployed capital into 5C Investment Partners, a New York-based firm led by former Goldman Sachs professionals, as it builds exposure to what it sees as a growing and evolving opportunity set.