Key facts
- Stresses in private credit markets are extending into private equity markets.
- Partners Group has capped redemptions due to industry-wide volatility.
- Partners Group flagged more withdrawal requests from its funds.
- Investor skepticism about valuations, transparency, and liquidity in private markets is impacting the asset class.
- Blackstone's private credit fund capped withdrawals at 5% after facing requests for 10% of shares.
- Cliffwater's fund saw 17% redemption requests, also capped at 5%.
Stresses within the private credit market are now spilling over into adjacent private equity markets. Swiss asset manager Partners Group, which oversees approximately $185 billion, has capped redemptions this week, signaling the widespread volatility originating from private credit. The firm reported an increase in withdrawal requests from its funds, attributing the impact to industry-wide volatility. This situation is not isolated to Partners Group; Blackstone's private credit fund capped withdrawals at 5% after receiving requests for 10% of shares, and Cliffwater's $31.3 billion fund saw 17% redemption requests, also capped at 5%. These events follow $7.1 billion in redemptions across eight major vehicles in the first quarter. The rapid expansion of private credit is also slowing, with U.S.-focused direct lending issuance plummeting 40% to $44.76 billion in the second quarter. Industry data indicates subdued fundraising and elevated redemption requests, signaling a cautious phase for the industry and potentially curbing earnings for private credit managers.