Daily Pricing Is Not Daily Liquidity

PIMCO

Lotfi Karoui

Research

6 Pages

PIMCO argues that more frequent private credit marks do not necessarily create real liquidity or better price discovery. The core issue is observability, since model driven marks can still diverge without market clearing transactions to anchor prices.

Key Takeaways

Marks Still Diverge: By year end 2025, identical loans across multiple BDC portfolios were marked about 5 points apart on average.
Dispersion Is Skewed: PIMCO estimates 83% of shared BDC loans are priced within 2 points, leaving 17% with wider and often upside skewed marks.
Liquidity Needs Compensation: Daily pricing cannot fix slow settlement, transfer restrictions, and limited two way flow, so investors should still demand an illiquidity premium.
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