Jeffrey Gundlach, CEO of DoubleLine Capital, said the market was stuck in a holding pattern with few assets offering meaningful returns, while warning that the stress on private credit could worsen as investors rushed for liquidity. “Right now, it’s like a market that’s going nowhere, it’s like there’s no trend. There’s very little that’s going up. There’s nothing that’s dramatically down. There’s nothing that has made significant gains in the last nine months,” Gundlach said on CNBC’s “Closing Bell.” Gundlach believes this environment is somewhat similar to the period leading up to the 2008 financial crisis, when asset prices appeared to be rising and early signs of tension were dismissed as isolated. “It’s a little bit like 2006, where everything is overrated, and the cracks are starting to show. But everyone’s like, everything is fine, it’s fine, it’s just software. But it’s not just software,” he said. “We all know that the private credit industry was flooded with redemptions, which were well over 5%.” His comments came as investors increasingly scrutinized parts of the private credit market, particularly funds exposed to riskier borrowers such as software companies. Redemption pressure has already surfaced in some stocks, raising questions about liquidity management in an asset class that has grown rapidly in an era of low interest rates. “Anyone who’s been around this block at least as many times as I have, or half as many times as I have, should know that in the next liquidity window from these investors, especially retail investors, they’re going to demand a lot more money than they did in March,” he said.
