In this chart

Stress in private credit is not distributed evenly. Since interest rates began rising, write-down rates have climbed faster at smaller funds than larger ones — and the gap has widened.

In Q3 2025, nearly 20% of loans in smaller funds were marked below 80% of principal, a rough threshold for distress. For larger funds, the share was 13%. The divide is sharper still for severe impairments: Smaller funds had around 13% of loans marked below 50% of principal, while larger funds were in the high single digits.

These marks do not necessarily signal imminent losses. But the pattern points to a growing and uneven distribution of credit stress that makes manager selection and an understanding of portfolio construction increasingly important for allocators.