Private‑credit strain

Investors are trying to pull money out of private-credit funds, and some of the industry’s biggest managers are slowing those exits. (bloomberg.com) Private credit is lending that happens outside public bond markets, often through funds that make direct loans to privately owned companies. Bloomberg reported April 13 that the market has grown to about $1.8 trillion, and that recent redemption requests hit funds run by Apollo Global Management, BlackRock and Ares Management. (bloomberg.com) The pressure has been clearest in non-traded business development companies, which usually let investors redeem only a limited slice of shares each quarter. Bloomberg reported in January that investors in business development companies with more than $1 billion in assets sought to withdraw more than $2.9 billion in the fourth quarter of 2025, up 200% from the prior quarter. (wealthmanagement.com) Blue Owl became the most visible example in early April. Its strategist wrote that first-quarter redemption requests equaled 40.7% of net asset value at Blue Owl Technology Income Corp. and 21.9% at Blue Owl Credit Income Corp., while the funds’ standard quarterly repurchase limit was 5%. (investmentnews.com) Reuters reported on April 2 that Blue Owl limited withdrawals from those two funds after what it called a historic surge in requests. CNBC reported the firm blamed “heightened market concerns around artificial intelligence-related disruption to software companies,” a sector where private-credit lenders have large exposure. (usnews.com; cnbc.com) Those software worries have been building since late 2025. Bloomberg said investors were already rattled by the collapses of First Brands Group and Tricolor Holdings, then grew more concerned that some software borrowers could lose revenue as customers shift to cheaper artificial intelligence tools. (bloomberg.com) The selling has also exposed a basic mismatch in these products: investors can ask for cash every quarter, but the underlying loans are hard to sell quickly. Axios noted in March that private-credit funds typically do not have to meet all redemption requests, because fund documents allow managers to cap withdrawals. (axios.com) Another fault line is conflicts around distribution. InvestmentNews reported that iCapital, a platform used by financial advisers to access alternative investments, counts firms including Blue Owl, Blackstone and KKR among its investors while also distributing products from private-credit managers on its platform. (investmentnews.com) iCapital disclosed in its Form ADV, updated in March, that its ownership structure creates “potential conflicts of interest” with respect to alternative investments, according to InvestmentNews. The same report said iCapital strategist Sonali Basak discussed Blue Owl’s redemption data in an April 3 note but did not mention that Blue Owl is an investor in iCapital; the firm’s disclosure document does describe that conflict. (investmentnews.com) Not every corner of the market is seeing the same stress. Hamilton Lane said on April 6 that defaults remain “contained” and that recent problems are company-specific rather than systemic, even as it acknowledged redemption queues and high-profile bankruptcies have put the asset class under heavier scrutiny. (hamiltonlane.com) For now, the market’s test is simple: investors want liquidity from funds built around illiquid loans, and managers are using the gates they wrote into the rules. (bloomberg.com; axios.com)