Private‑credit strains
- Investors sought to pull about $20 billion from private-credit funds in the first quarter, hitting Apollo, Ares and Blackstone as managers limited withdrawals and exposed strains in semi-liquid lending vehicles. - Barings capped withdrawals at 5% after investors requested redemptions equal to 11.3% of shares, while KKR’s K-FIT fund curbed exits after repurchase requests reached 6.3% of outstanding shares. - Regulators also cut the community bank leverage ratio to 8% from 9% as private-credit stress spread into bank funding and retail channels. (ft.com)
Private credit is under pressure after investors tried to pull roughly $20 billion from funds in the first quarter and several managers limited withdrawals. (ft.com) (pitchbook.com) Barings said on April 6 that its Private Credit Corp fund would honor only about 44.3% of repurchase requests after investors sought to redeem 11.3% of shares, above the fund’s 5% cap. (money.usnews.com) Bloomberg reported on April 1 that KKR FS Income Trust, a non-traded business development company known as K-FIT, curbed redemptions after requests reached 6.3% of outstanding shares. (bloomberg.com) Private credit funds raise money from wealthy individuals and institutions, then make loans that do not trade daily. When investors ask for cash faster than those loans can be sold, managers use gates or caps to slow withdrawals. (pitchbook.com) (congress.gov) The pressure has been strongest in semi-liquid vehicles sold to retail and wealth clients. Bloomberg reported in March that Apollo Global Management and Ares Management blocked investors from getting even half of the money they wanted to withdraw from some funds. (bloomberg.com) Reuters reported on April 2 that Wall Street banks were tightening lending as concern spread over valuations, transparency and losses tied to borrowers including First Brands and Tricolor. (investing.com) A congressional research note said private-credit funds had about $500 billion of exposure to software companies as of December 2025, and that automated coding tools were cutting revenue at some software borrowers. Reuters separately reported that investors were citing artificial-intelligence disruption as one reason for redemptions. (congress.gov) (money.usnews.com) Even as money comes out, firms are still building new products. Bloomberg reported on April 24 that KKR and Capital Group plan to launch a public-private credit fund in Asia this year to attract more retail money. (bloomberg.com) Bank regulators moved in parallel. The Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency said this week that the community bank leverage ratio will drop to 8% from 9% and that the grace period for banks that fall out of compliance will double to four quarters. (americanbanker.com) (bloomberg.com) Wells Fargo was pulled into a separate credit fight on April 24 when President Donald Trump said his administration would look into banks’ treatment of Los Angeles wildfire victims and singled out the lender by name. USA Today reported that Wells Fargo said it was already offering relief options. (usatoday.com) The immediate test is whether withdrawal caps buy enough time for managers to meet redemptions without marking down loans more sharply. The answer will shape how much retail money private credit can keep attracting in 2026. (ft.com) (pitchbook.com)
