Investors asked to take out $19.5 billion from private credit direct lending funds in the first quarter, according to a Business Insider analysis of SEC filings.
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However, firms only paid out 53% of requests, or $10.4 billion, across the 17 investment vehicles Business Insider analyzed. Nine funds decided to cap investor withdrawals to the maximum amount they are required to pay out per quarter (either 5% or 7%).
These redemptions are a sign of faltering confidence among some investors in non-traded private credit funds, as concerns mount about exposure to software loans in the age of generative AI and the difference between private and public market valuations. While some investors are pulling money out, others continue to invest, meaning that these vehicles may see much smaller net outflows, or even net inflows, for the quarter.
Private credit, or loans written by non-bank lenders such as asset managers, has been one of the fastest-growing asset classes in the first half of the decade. The largest segment of private credit is direct lending to businesses to help fund their operations, much of it to finance leveraged buyouts for its private equity cousin.
The private markets industry has also been making a large push into retail investors via semi-liquid investment vehicles sold to them by their wealth managers. The private credit vehicles, either business development companies or interval funds, promise higher returns than “public” credit, but the trade-off is that investors can only pull their money out quarterly.
The data comes from SEC filings. For some firms, the Q1 2026 numbers for are estimates based on their most recently disclosed net asset values, as they have not yet released the March net asset values that are the basis for final payouts to investors.
Business Insider included large funds that have a large percentage of direct lending loans, but didn’t include funds that focused on other strategies, like asset-backed lending. The figures have been rounded to the nearest 10th.
Many of these funds chose to limit withdrawals for the first time in the first quarter of this year. While that decision may irritate some investors, it helped keep more than $9 billion in these funds.
Requests were up 142.2% from the last quarter of 2025, but actual redemptions were only up 28.9% from the $8 billion redeemed at the end of last year.
While the $10.4 billion withdrawn this past quarter was a record, the amount withdrawn had been climbing steadily before that, jumping 154% from the third to fourth quarter when investors pulled $8 billion.
We decided to focus from the second quarter 2025 onwards because that was when redemption numbers began to increase, potentially after the impact of tariffs on BDCs.
The largest payout, by far, came from Blackstone’s Private Credit Fund, the largest non-traded BDC with $82.7 billion in assets. It returned $3.7 billion to investors after the firm declined to limit withdrawals to 5%.
Just because Blackstone returned $3.7 billion to investors doesn’t mean it has $3.7 billion less cash on hand, as nearly $2.5 billion of money came into the fund from new investors, as well as the firm and some executives.
The biggest requests in dollar amounts were Cliffwater’s Corporate Lending Fund and Blue Owl Credit Income Corp.
Blue Owl Technology Income Corp, Blue Owl’s smaller tech-focused fund, had the highest percentage of requests to redeem in the last two quarters and redeemed 15.40%, or $527 million, in the fourth quarter of last year. It also sold some assets held by this fund in the first quarter, bolstering its liquidity. The next quarter, it decided to limit withdrawals.
Andy Kiersz created the charts for this story.
