FACTBOX-Private credit jitters trigger caps on redemptions, tighter lending

By Pritam Biswas and Arasu Kannagi Basil

April 2 (Reuters) - Private credit market jitters have spilled onto Wall Street, with several funds capping withdrawals and some major U.S. banks tightening lending to the $2 trillion industry.

Sentiment has soured over valuations and transparency, as well as the high-profile bankruptcies of auto-parts supplier First Brands and car dealership Tricolor.

U.S. banks had almost $348 billion in loans outstanding to the so-called non-depository financial institutions as of December 31, and a further $341 billion to private equity funds, according to Moody's.

Alternative asset managers' shares have also sold off this year amid worries over the valuation of software companies they own or finance, as rapid advances in AI threaten to disrupt traditional business models.

Below is a list of some of the recent moves by Wall Street's biggest banks and private credit funds:

BLUE OWL

Private capital firm Blue Owl Capital OWL.N said on April 2 it would cap withdrawals from two retail-focused funds after receiving a surge in redemption requests.

Investors asked to withdraw 40.7% of the shares in technology-focused Blue Owl Technology Income Corp (OTIC), and 21.9% of shares in larger fund Blue Owl Credit Income Corp (OCIC).

Blue Owl in late February said it was selling $1.4 billion in assets from three of its credit funds so it can return capital to investors and pay down debt, and permanently halted redemptions at one of the funds.

"We're not halting redemptions, we are simply changing the method by which we're providing redemptions," Blue Owl co-President Craig Packer had said at the time.

JPMORGAN CHASE

The largest U.S. bank JPM.N has reduced the value of some loans ‌to private credit funds after reviewing the impact of market turmoil around software companies, Reuters reported last week, citing two people familiar with the situation.

JPMorgan went through its financing portfolio - name by name and then sector by sector - and put different marks on loans such as those with underlying software exposure, one of the sources said.

The re-marking does not happen often but this isn't the first time ​the bank has re-marked loans, the first source told Reuters, adding the move was "important to do when markets warrant it rather than waiting for a crisis to ‌come along."

JPMorgan's credit agreements for the private-credit space allow it to re-mark valuations based ​on the collateral of the fund if there is a market dislocation, the source said, adding the marks are not significant.

The move to mark down the value of certain loans to private credit players will reduce ​lending to the funds, Reuters reported, citing a source familiar with the matter.

MORGAN STANLEY

The Wall Street banking giant MS.N limited redemptions at one of its private credit funds after investors sought to withdraw almost 11% of shares outstanding, according to a regulatory filing.

Morgan Stanley's North Haven Private Income Fund (PIF), which was invested in 312 borrowers across 44 industries as of January 31, returned roughly $169 million, or about 45.8% of investors' tender request, ​for the quarter.

BLACKROCK

The world's largest asset manager BLK.N said on March 6 that it has restricted withdrawals from its flagship HPS Corporate Lending Fund (HLEND) after a jump in requests.

HLEND received $1.2 billion in withdrawal requests in the first quarter, equal to about 9.3% of its net asset value. The fund told investors it would distribute $620 million under its quarterly redemption program, reaching the 5% limit at which managers can curb further withdrawals.

Subscriptions to the fund were $840 million in ​the first quarter, ⁠lower than the $1.2 billion that investors originally sought to withdraw. According to company documents, 19% of HLEND's portfolio is tied up in software.

OAKTREE

A private credit fund owned by Oaktree Capital Management decided to honor the full 8.5% in redemption requests it received in the first quarter, according to a regulatory filing on March 27.

The fund will repurchase roughly 13.9 million, or 6.8% of the ‌outstanding shares from investors in the Oaktree Strategic Credit Fund (OSC), while Oaktree's parent Brookfield will purchase another 1.7% of shares to help meet 100% of the redemption requests.

BLACKSTONE

Alternative asset manager Blackstone BX.N said on March 2 that its flagship private-credit fund, BCRED, saw a sharp rise in withdrawal requests in the first quarter.

The company let clients pull a bigger-than-usual $3.7 billion from the $82 billion fund. Adding $2 billion of new commitments left net withdrawals at $1.7 billion.

The surge in requests led the fund to raise its usual 5% quarterly redemption cap to 7%, while Blackstone and its employees injected $400 million to meet all withdrawals.

APOLLO GLOBAL

Apollo Global's APO.N $25 billion private credit fund said on March 23 it was capping redemptions at 5% of its shares after ​investors sought to withdraw roughly 11.2% of the total outstanding shares.

The fund said the decision to buy back less than ​investors requested was consistent with its objectives for liquidity, or the ability ⁠to meet its payment obligations without damaging the value of its assets.

The withdrawals leave the fund with about $730 million of gross outflows for the period, balancing ​out inflows of about $724 million.

The fund expects ‌to ⁠return about 45% of the requested capital to each redeeming investor.

ARES

Ares Management's ARES.N private-credit fund limited redemptions at 5% after investors sought to withdraw roughly 11.6% of the total outstanding shares, it disclosed in a regulatory filing on March 24.

The majority of the redemption requests were made by a limited number of family offices and smaller institutions that represent less than 1% of its over 20,000 shareholders, it said.

Ares Strategic Income Fund will return $524.5 million, or 5% of its outstanding shares.

KKR

KKR's KKR.N non-traded private credit fund limited redemptions at 5% of shares after requests ​for withdrawals surged in the first quarter, according to a letter to ‌shareholders on March 31.

The fund, KKR FS Income Trust, received repurchase requests totaling roughly 6.3% of outstanding shares in the first three months of 2026, ​of which it plans to satisfy about ​80%.

CLIFFWATER

Investors in Cliffwater LLC's flagship private-credit fund ​looked to redeem about 14% of ‌shares in the first quarter, leading the firm to cap its repurchases at 7%, according to a report by Bloomberg News.

As an interval fund, it ​is required to repurchase shares every quarter. It set that rate at 5%, with discretion to ​repurchase as much as 7%, the report added.