Pimco Squares Up for a Bareknuckle Fight in Private Credit

Pacific Investment Management Co. has been one of the loudest prophets of doom on private credit in recent months. Now it’s saying cracks in the red-hot asset class could appear as early as this year — and that it’s poised to use roughhouse tactics more common to hedge funds to grab bargains.

The investment giant has a history of making chunky contrarian bets going back to a money-spinning punt on cheap mortgage debt after the financial crisis. If it turns out to be right as the Cassandra of private credit, this booming $1.7 trillion market is about to go through ...