Private credit shows cracks

Investors are trying to pull money from parts of private credit, forcing some of the industry’s biggest funds to slow or block withdrawals. (bloomberg.com) Bloomberg reported on April 13 that the private-credit market has grown to about $1.8 trillion and that funds run by Apollo Global Management, BlackRock and Ares Management have faced unusually heavy redemption requests in recent weeks. In many cases, the firms used fund rules that let them limit how much cash leaves at once. (bloomberg.com) Apollo Debt Solutions, a $15.1 billion business development company, said on March 23 that first-quarter withdrawal requests reached 11.2% of shares, more than double its 5% quarterly cap. Apollo said it would return about 45% of the cash investors asked for and keep the rest in the fund for now. (bloomberg.com) Ares disclosed a day later that investors in its Strategic Income Fund sought to redeem 11.6% of shares, and the firm also held payouts to the 5% limit. Bloomberg said the Apollo and Ares caps alone left roughly $1.5 billion of requested withdrawals stuck inside the funds. (bloomberg.com) Private credit is money lent outside the public bond market, usually by funds that make loans directly to companies and do not trade those loans every day. That structure can produce steadier reported values in calm periods, but it also means investors cannot always get cash back quickly when many people head for the exit at once. (forbes.com) The pressure this spring has come from several directions at once. Bloomberg said investors are worrying about borrower defaults, stress in software lending tied to artificial intelligence disruption, and the war in Iran. (bloomberg.com) Software has become a focal point because private lenders financed many buyouts of software companies when borrowing was cheap and valuations were high. The Bank for International Settlements said software company stocks fell almost 30% between October 2025 and February 2026, while business development company shares fell about 10% on average. (bis.org) Losses have already shown up in other corners of the market. First Brands Group, an auto-parts supplier with more than $10 billion in liabilities, filed for Chapter 11 protection on September 28, 2025, after a rapid deterioration that rattled debt investors. (restructuring.ra.kroll.com) Not everyone is reading the pullback the same way. Goldman Sachs Chief Executive David Solomon said on April 13 that retail investors have been worried about private credit and that the noise could continue, but he also said Goldman still sees the area as attractive. (bloomberg.com) Other firms are still raising money even as retail investors retreat. Bloomberg reported on April 13 that Adams Street Partners closed a $7.5 billion private-credit fund, more than double the size of its prior vehicle, showing that institutional demand has not disappeared with the redemption wave. (bloomberg.com) The immediate test is not whether private credit survives, but whether funds built around hard-to-sell loans can meet promises of periodic liquidity during a downturn. March’s redemption caps at Apollo and Ares turned that question from a marketing pitch into a cash-management problem. (bloomberg.com)