Blue Owl withdrew its loans after discovering financial "tricks," causing a major UK mortgage company to go bankrupt.

US private credit giant Blue Owl Capital demanded early repayment from UK bridge loan firm Century Capital Partners after discovering anomalies in its financial reports, directly triggering Century Capital's entry into bankruptcy administration.

According to a March 17 report by the Financial Times, Blue Owl decided to accelerate recovery of its subordinated debt holdings in Century Capital after learning that the firm had dismissed a director due to financial discrepancies. This withdrawal triggered bankruptcy proceedings for the bridge loan institution, which primarily serves wealthy clients in London and surrounding areas. Century Capital owes creditors nearly £100 million.

The bankruptcy occurred weeks before the collapse of Market Financial Solutions, a larger bridge loan company. The latter’s bankruptcy has already sparked fraud accusations and put private credit firms providing capital under the regulatory spotlight.

Bridge loan institutions mainly provide short-term mortgage loans, usually for buyers who have not yet sold their previous property. Century Capital’s core business involves using properties in London and nearby counties as collateral to offer loans to wealthy individuals.

Blue Owl manages assets exceeding $300 billion and is considered a bellwether for the private credit industry. Affected by the incident and market concerns, its stock has dropped by more than 40% so far this year.

Financial anomalies trigger debt acceleration

As bankruptcy restructuring progresses, more key details of Century Capital’s collapse have emerged.

According to documents obtained by the Financial Times and sources cited, Blue Owl, through its asset-backed lending division, holds the riskiest "subordinated" portion of Century Capital’s debt structure. Blue Owl became a creditor after it acquired Atalaya Capital Management in 2024, inheriting its lending relationship with Century Capital. Bloomberg previously reported Blue Owl's debt exposure to be around £36 million.

The crisis traces back to the end of 2025. Fundraising documents prepared by founder Paul Munford for restarting the business revealed that Century Capital had dismissed a director due to "financial irregularities," followed by several corporate governance reforms aimed at "preventing recurrence."

However, the reforms failed to restore creditor confidence. The documents note: "Despite positive communication with all parties, subordinated creditors decided to accelerate recovery of their secured debt, directly leading to bankruptcy administration." Currently, no fraud accusations have been leveled against Century Capital or its management, though creditors indicated their actions were based on evident issues in financial reporting and internal controls.

The auditors’ early exit further fueled skepticism. Sopher + Co resigned a month before bankruptcy and declared in the UK company registry that the departure was due to "a significant amount of outstanding, unpaid fees."

Bankruptcy liquidator RSM wrote in restructuring documents that it expects to recover all funds to repay creditors and aims to sell the loan book before March. The documents reveal that Century Capital's loan book peaked at £165 million.

Founder plans to relaunch new business

While Century Capital’s bankruptcy aftermath lingers, its founder is planning a comeback. Fundraising documents obtained by the Financial Times show Paul Munford preparing to relaunch bridge lending under the name "Century London," with his son Freddie Munford continuing to oversee lending.

The documents state Century London will be financed through off-balance-sheet loans from banks, private investors, and private credit institutions. Citing market rationale, the documents say traditional banks are constrained by tightening regulation and balance sheet limits, lengthening lending cycles, thus creating structural opportunities for private credit firms.

The successive collapses of Century Capital and Market Financial Solutions have brought private credit’s risk exposure in the UK mortgage market into the spotlight. As both bankruptcies continue to unfold, the market expects regulators to strengthen scrutiny of the sector.

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