After Blue Owl Pulled Financing Over "Financial Irregularities," a Major UK Mortgage Lender Immediately Went Bankrupt

U.S. private credit giant Blue Owl Capital demanded early repayment from UK bridge lending firm Century Capital Partners after finding anomalies in its financial reports, directly triggering the latter's entry into administration.

According to the Financial Times on March 17, Blue Owl decided to accelerate the recovery of its subordinated debt holdings after learning that Century Capital had dismissed a director over financial discrepancies. This withdrawal led the bridge lender, which focuses on wealthy clients in London and surrounding areas, to enter insolvency proceedings. Century Capital owes creditors nearly £100 million.

The bankruptcy occurred just weeks before the collapse of a much larger bridge lender, Market Financial Solutions. The latter’s bankruptcy has already triggered fraud allegations and has put private credit firms that provide funding in the regulatory spotlight.

Bridge lenders primarily offer short-term mortgage loans, with clients usually being buyers who have not sold their previous properties. Century Capital’s business was centered on lending to wealthy individuals secured against properties in London and surrounding counties.

Blue Owl manages over $300 billion in assets and is seen as a bellwether in the private credit industry. Impacted by these events and prevailing market concerns, its share price has dropped by more than 40% so far this year.

Financial Irregularities Trigger Accelerated Debt Repayment

As the bankruptcy restructuring progresses, more key details have surfaced regarding Century Capital's collapse.

Documents obtained by the Financial Times and information from insiders reveal that Blue Owl, through its asset-backed lending arm, held the riskiest "subordinated" tranche of Century Capital's debt structure. Blue Owl became a creditor after acquiring Atalaya Capital Management in 2024 and inheriting its existing lending relationship with Century Capital. Bloomberg previously reported that Blue Owl's related debt exposure was about £36 million.

The trigger for the crisis dates back to the end of 2025. Fundraising documents prepared by Century Capital’s founder Paul Munford for business relaunch indicated that a director was dismissed due to "financial irregularities." Several corporate governance reforms were subsequently implemented in hopes of “preventing any recurrence of such violations.”

However, these reforms failed to restore creditor confidence. The documents noted: "Despite proactive communication with all parties, the subordinated creditor still decided to accelerate the recovery of its secured debt, directly leading the company into administration." Currently, creditors have not made fraud allegations against Century Capital or its management, but have stated that their actions stemmed from significant issues identified in financial reporting and internal controls.

The auditor’s early departure further fueled suspicions. Sopher + Co resigned a month before the company’s bankruptcy, citing "substantial unpaid fees outstanding" in their statement to the UK Companies House.

RSM, which is managing the liquidation, stated in the restructuring document that they expect to recover all funds to pay creditors and aim to complete the sale of the loan book by March. The documents also disclosed that at its peak, Century Capital’s loan book reached £165 million.

Founder Plans to Launch New Venture

Even as the fallout from Century Capital’s bankruptcy continues, its founder is preparing a comeback. According to fundraising documents obtained by the Financial Times, Paul Munford is actively preparing to relaunch a bridge lending business under the name "Century London," with his son Freddie Munford expected to continue leading the lending operations.

The documents reveal that Century London will raise funds through off-balance-sheet loans from banks, private investors, and private credit institutions. Citing market logic, the documents note that, due to tighter regulations and balance-sheet constraints, traditional banks have lengthened lending cycles, creating structural opportunities for private credit firms.

The successive collapses of Century Capital and Market Financial Solutions have put the private credit sector’s risk exposure in the UK mortgage market under the spotlight. As these two bankruptcy events continue to unfold, market participants expect regulators to strengthen their scrutiny of the sector.