Private credit stress
Investors are rushing to withdraw from private credit, with major managers — Apollo, BlackRock and Ares — reporting unprecedented redemption requests in what's described as a $1.8 trillion market. (el-balad.com) Analysts warn the broader private credit space (some estimates peg it near $3 trillion) could be a systemic risk if defaults and redemptions accelerate. (bloomberg.com) (investorplace.com)
Apollo’s Apollo Debt Solutions BDC enforced its 5% quarterly redemption cap after clients sought to redeem 11.2% of shares, and the fund told shareholders it would return roughly 45% of requested capital to redeeming investors. (bloomberg.com) Ares’ Ares Strategic Income Fund reported $1.24 billion of redemption requests — about 11.6% of its $10.7 billion NAV — and said it would honor only the built‑in 5% cap, fulfilling roughly $524 million (about 43% of requests). (bloomberg.com) BlackRock’s HPS Corporate Lending Fund (HLEND), a $26 billion non‑traded BDC, received withdrawal requests near 9.3% of assets in Q1 and paid out roughly 5% of NAV (about $620 million), invoking the fund’s quarterly limit. (bloomberg.com) Market‑size estimates vary: Bloomberg and several market trackers frame the sector at about $1.8 trillion, while industry groups and some analysts place global private‑credit AUM in the neighborhood of $3 trillion to $3.5 trillion. (bloomberg.com) The combined enforcement of pro‑rata caps by Apollo and Ares will leave roughly $1.5 billion of investor requests unfulfilled and still invested in those funds, and banks including JPMorgan are altering product structures — JPMorgan is planning a private‑credit vehicle that would allow 7.5% quarterly redemptions to address liquidity strain. (bloomberg.com) Credit stress is rising: Fitch’s U.S. Private Credit Default Rate rose to 5.8% TTM through January 2026 (and eased to 5.4% in February), while Fitch also recorded a 9.2% PMR default rate for 2025; separately, Bloomberg reported Ares’ private‑credit vehicle posted its steepest monthly loss in February 2026. (fitchratings.com)
