The Quarter the Marks Moved
Why Private Credit Funds Repriced Their Portfolios in Q1 2026
In Q1 2026, private credit funds marked down their portfolios in unison.
Public BDCs took a 3.3% NAV hit, according to Raymond James. Public markets did not welcome the news with open arms: BIZD, VanEck’s BDC ETF, is down 4.6% since March 31.
Today, I wanted to take a look at the performance of large non-traded funds. I pulled data on the seven non-traded private credit evergreen funds, and the markdowns ranged from roughly -1.6% to -4.2% of beginning NAV.
These markdowns occurred across different managers, different underwriting teams, different sectors, and different borrower bases. And, like synchronized swimmers, all of them moved in the same direction at the same time:
For eight consecutive quarters in our sample, unrealized gains and losses fluctuated within a relatively narrow band. Then Q1 2026 arrived. It seems the industry reached the same conclusion simultaneously, and valuations were adjusted.
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But Why Q1 2026?
The obvious question is why these markdowns happened in Q1 2026 rather than Q3 2025 or Q4 2025. After all, most of the underlying stress wasn’t new: