Private Credit Funds Experience Increased Withdrawals in Q2

Blackstone's logo is seen in Manhattan, New York City, U.S., on July 29, 2025. REUTERS/Mike Segar/File Photo. On June 4 (Reuters) - Private credit funds aimed at affluent investors are encountering renewed challenges in the second quarter, as preliminary reports indicate ongoing redemption pressures fueled by concerns surrounding software exposure, asset valuations, and the limited transparency of this investment class. Key U.S. non-traded private credit funds began closing their redemption windows last Friday, with investors and analysts closely monitoring withdrawal requests to assess the persistence of pressures from the previous quarter. According to a Reuters review of eight large funds, first-quarter redemptions reached approximately $7.1 billion, marking the highest level recorded, as weaker fundraising efforts and upcoming June redemption deadlines pose another challenge to investor interest. Recent developments from private credit funds this week include: BLACKSTONE, which has capped withdrawals at the Blackstone Private Credit Fund after investors sought to redeem 10% of outstanding shares in the second-quarter tender offer—double the fund's 5% quarterly repurchase limit. The fund reported capital inflows at around 2% of net asset value, resulting in a net outflow of roughly 3% of NAV, as repayments and inflows exceeded share repurchases. While BCRED met all withdrawal requests in the first quarter, it noted that demand for repurchases diminished towards the end of the second-quarter offer and was lower for onshore investors compared to the prior quarter. CLIFFWATER communicated to investors in a shareholder letter on Tuesday that participants in its $31.3 billion private credit fund sought to redeem 17% of shares in the second quarter, despite redemptions being capped at 5%. This marked an increase from the first quarter when investors aimed to redeem 14% of shares, with redemptions capped at 7%. The fund, structured as an interval fund, is required to periodically offer repurchases of shares and contains approximately 4,000 assets, including direct loans to companies and interests in funds managed by other firms. Reporting by Patturaja Murugaboopathy and Arasu Kannagi Basil in Bengaluru; editing by Vidya Ranganathan and Susan Fenton. Our Standards: The Thomson Reuters Trust Principles.