Daily Private Credit Marks Only Work Where Loans Trade

What's New

Daily marks are reliable for private credit that trades and weak for loans that don't, according to managers at this week's CAIS Alternative Investment Summit. The debate follows Apollo's rollout of daily valuations across its roughly $850 billion credit business, Bloomberg reported. Monroe Capital CEO Ted Koenig called daily marks on illiquid assets "an illusion of precision." Fortress co-CEO Drew McKnight said a daily mark built on spreads cannot show whether a loan is still worth par. Allocators should ask what share of a fund's NAV comes from observed trades.

Why It Matters

Marks matter more once investors can redeem at net asset value. A fund that overstates NAV pays departing investors too much. The investors who stay absorb the shortfall. Locked-up drawdown funds avoided this because loans simply repaid or defaulted. Semi-liquid vehicles sold to retail and retirement accounts have no such buffer. Their managers carry the most risk, and the SEC's September reminder on fair value raised the bar.

By The Numbers

• $1.8 trillion private credit market now faces open questions about how managers value loans that rarely trade.

• $40 trillion is the broader private credit universe Apollo describes, most of it investment grade.

• Over $30 billion of those investment-grade loans have traded, according to Apollo. They account for most of its daily marks.

• 19% was BlackRock TCP Capital's cut to year-end 2025 NAV. Its stock fell about 15%, so the market had already priced in part of the loss.

Between The Lines

Both sides of the debate are defending a business model.

• Apollo's daily book is mostly investment grade. That segment is the easiest to price each day, so the standard favors Apollo's own mix.

• Lenders with thinly traded books face a harder comparison. Quarterly fair value looks stale once a large peer prices daily.

• Index-based marks track spreads. They miss borrower-level stress until a loan stops paying.

• BlackRock TCP shows the cost of late marks. Six investments drove roughly two-thirds of its NAV decline. Saba Capital has since taken a stake.

The Wrap

Allocators can trust daily marks for the traded, investment-grade end of private credit. That holds while those loans keep trading in volume. It breaks down in middle-market books, where a daily number follows spreads and lags borrower stress. Managers of semi-liquid funds should report NAV by pricing source: observed trades, index models, and quarterly fair value. Expect more large managers to take a public position on daily marks within two quarters.