The slow-motion private credit crunch continues
You may have missed it, what with the Iran war, the price of oil spiking, or the ongoing questions about the durability — and future profitability — of the AI capex boom.
But there are clear signs of malaise in private credit markets — the massive corporate bond and loan markets that typically burble away quietly in the background while the stock markets garner the headlines.
The Financial Times reported on Friday:
“BlackRock has limited withdrawals from one of its flagship private credit funds following a surge in redemption requests, as investors retreat from the asset class and questions about credit quality intensify...
The decision to cap withdrawals at 5 per cent will be closely scrutinised by the industry as outflows climb across semi-liquid private credit funds. The vehicles have drawn in hundreds of billions of dollars from retail investors and wealthy individuals who were enticed by the high returns on offer but have started to bolt at the first signs of stress.”
That news follows an unsettling recent pattern of private credit firms telling investors they cannot have their money back on demand, most notably Blue Owl last month, which also limited redemptions.
Normally the goings-on of the credit markets are of little interest to stock jockeys. But the concerns about credit have started to bleed into the stock market, too.
Of the S&P 500’s 11 industry groups — known as sectors — the financial sector (Financial Select Sector SPDR Fund) is by far the year’s worst performer, down more than 9% in 2026, with firms with links to private credit such as Ares Management, Blackstone, KKR & Co., and Apollo Global Management some of the worst performers. They’re all down more than 20% since the start of the year.
If investors were looking for another thing to worry about, this would likely be a good one to add to the list.
But there are clear signs of malaise in private credit markets — the massive corporate bond and loan markets that typically burble away quietly in the background while the stock markets garner the headlines.
The Financial Times reported on Friday:
“BlackRock has limited withdrawals from one of its flagship private credit funds following a surge in redemption requests, as investors retreat from the asset class and questions about credit quality intensify...
The decision to cap withdrawals at 5 per cent will be closely scrutinised by the industry as outflows climb across semi-liquid private credit funds. The vehicles have drawn in hundreds of billions of dollars from retail investors and wealthy individuals who were enticed by the high returns on offer but have started to bolt at the first signs of stress.”
That news follows an unsettling recent pattern of private credit firms telling investors they cannot have their money back on demand, most notably Blue Owl last month, which also limited redemptions.
Normally the goings-on of the credit markets are of little interest to stock jockeys. But the concerns about credit have started to bleed into the stock market, too.
Of the S&P 500’s 11 industry groups — known as sectors — the financial sector (Financial Select Sector SPDR Fund) is by far the year’s worst performer, down more than 9% in 2026, with firms with links to private credit such as Ares Management, Blackstone, KKR & Co., and Apollo Global Management some of the worst performers. They’re all down more than 20% since the start of the year.
If investors were looking for another thing to worry about, this would likely be a good one to add to the list.
