DoubleLine CEO Jeffrey Gundlach, who has been especially critical of private credit for the past year warning last November that the space “has the same trappings as subprime mortgage repackaging had back in 2006,” raised fresh concerns about financial advisers and other principals who ushered retail investors into private credit and other so-called semi-liquid funds, suggesting they’ve been motivated by high fees as much as by their clients’ interests.

“It’s clear that prospectuses talked about the gating mechanism, but I have a feeling that the financial intermediaries, not all of them of course, but enough of them, didn’t explain,” he said Wednesday on a panel at the Milken Institute Global Conference in Beverly Hills.

The products have been “kept opaque and not granularly described,” he said according to Bloomberg. “That’s why everybody wants their money back: They’re starting to realize they might be the bag-holder.”

Meanwhile, in a sign even more pain is yet to come for the sector, Bloomberg reported that a group of banks led by JPMorgan is expected to shoulder paper losses of more than $500 million on a debt deal for software firm Qualtrics Internationa. The banks are preparing to use their own balance sheets to fund $5.3 billion of debt for Qualtrics’ acquisition of Press Ganey Forsta. That would make it the biggest “hung” deal in the leveraged finance market this year.

https://www.zerohedge.com/markets/gundlach-warns-bagholders-will-lose-money-private-credit-bdcs-slash-asset-values-jpm-faces