DoubleLine Reviews Real Risk in Late-Cycle Private Credit

TAMPA, Fla., Feb. 10, 2026 /PRNewswire/ -- Formerly high-flying private credit is now marked by significant structural risks with products being promoted in ways that can misrepresent the volatility of the space, caution DoubleLine's Robert Cohen, CFA®, Director of Global Developed Credit, and Chris Stegemann, Manager of Client Portfolio Management.

Their new paper, "Volatility Laundering in Private Credit: When Smooth Returns Hide Real Risk in the Late-Cycle Credit Environment" can be found here: https://doubleline.com/wp-content/uploads/DoubleLine-Volatility-Laundering-in-Private-Credit_02-2026.pdf

Messrs. Cohen and Stegemann begin with a look back at the pandemic-era environment that encouraged some borrowers to move from public credit to private credit and resultant significant alpha-generation opportunities. They then break down the progression of the composition of private credit that has resulted in the low credit quality and highly concentrated nature that mark the space in today's late-cycle environment. "DoubleLine believes that the companies that chose to remain in the private markets tend to be riskier credits," they write. "Why else would they be willing to finance through the more expensive option if not for needing the flexibility that comes with having a one-on-one borrower relationship?"

Messrs. Cohen and Stegemann also discuss marketing strategies used to promote private credit that can misrepresent the space's volatility, including claims of an "illiquidity premium." Investors should "recalibrate their expectations when assessing private versus public credit today," they warn, "particularly from an alpha-generation and late-cycle perspective."

Mr. Cohen joined DoubleLine in 2012. He is a Portfolio Manager and Director of the Global Developed Credit Group. Mr. Cohen oversees the group's investment activities in investment grade, high yield (HY) and bank loan corporate credit markets. He also leads the collateralized loan obligation (CLO) issuance effort at the firm. Mr. Cohen is a Portfolio Manager for the Opportunistic Income, Income Solutions, Low Duration, CLO and Floating Rate strategies. Mr. Cohen is a permanent member of the Fixed Income Asset Allocation Committee. Prior to DoubleLine, Mr. Cohen was a Senior Credit Analyst at West Gate Horizons Advisors (and its predecessor, ING Capital Advisors), where he worked as an Analyst covering bank loans and HY bonds. Prior to ING, he was an Assistant Vice President in the Asset Management Group of Union Bank, where he managed CLO and bank loan portfolios. Prior to Union Bank, he was an Associate Director of Corporate and Investment Banking at the Bank of Montreal in its Natural Resources Group. Mr. Cohen holds a B.A. in Economics from the University of Arizona and an MBA from the University of Southern California. He is a CFA® charterholder.

Mr. Stegemann joined DoubleLine in 2017. He is a Client Portfolio Manager and Manager of the Client Portfolio Management team. In this capacity, Mr. Stegemann is responsible for communicating DoubleLine's macroeconomic views and portfolio positioning via client engagement, published market commentary and dedicated strategy content, with a focus on DoubleLine's Fixed Income Asset Allocation strategies. Prior to DoubleLine, Mr. Stegemann was in mutual fund distribution for Putnam Investments. He holds a B.S. in Finance and minors in Accounting and Economics from Elon University's Martha & Spencer Love School of Business. Mr. Stegemann holds the FINRA Series 3, 6, 7 and 63 licenses.

About DoubleLine

DoubleLine Capital LP is an investment adviser registered under the Investment Advisers Act of 1940. DoubleLine's offices can be reached by telephone at (813) 791-7333 or by email at [email protected]. In addition to its headquarters in Tampa, Fla., and an office in Los Angeles, DoubleLine has offices in Dubai, London and Tokyo. Media can reach DoubleLine by email at [email protected]. 

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SOURCE DoubleLine