Private credit redemptions outpace payouts as gates widen

Investors asked to withdraw $15.6 billion from widely held private-credit funds in the second quarter, while managers paid back $5.9 billion, Robert A. Stanger data showed. The gap widened from the first quarter, when requests were about $13.9 billion and payouts were $7.4 billion, pointing to a tougher liquidity test for funds sold to individual investors.

The strain is landing as fresh fundraising slows. New private-credit inflows totaled about $500 million in May, the weakest level in at least 18 months and roughly 75% below January, the data showed.

Blackstone gate widens liquidity gap

Blackstone honored all redemption requests in the first quarter, then capped withdrawals at 5% to preserve capital for future investor demands. Requests also rose at Apollo Global Management, Ares Management and BlackRock's HPS private-credit unit, suggesting pressure has moved beyond the managers hit earliest in the cycle.

Blue Owl showed partial relief, with requests for its largest business-development company falling to 19% of shares outstanding from about 22%. Oaktree Capital Management moved more sharply against the trend, with requests at one fund dropping to 4.5% of shares from 8.5%, helped by rising net asset value and no nonperforming loans.

If redemption queues keep growing while fundraising stays weak, private-credit managers may reduce new lending to protect cash. That would tighten credit for lower-rated borrowers and lift default risk at the margin. By September 30, 2026, the key test will be whether third-quarter redemption requests narrow or force managers to keep withdrawal limits in place.