Carlyle’s flagship private credit interval fund, CTAC, has faced significant investor withdrawal requests, with more than 15% of assets sought to be pulled. This surge in redemptions, announced in a shareholder letter on Thursday, marks the latest rush away from funds offering broad access to the traditionally illiquid private credit asset class. Carlyle is a global investment firm, managing assets across private equity, real assets, and global credit for its investors.
The Carlyle Tactical Private Credit Fund (CTAC), which manages over $7 billion, received repurchase requests totalling approximately 15.7% of its shares in the first quarter. This figure vastly exceeds the fund’s typical 5% repurchase threshold, prompting managers to cap redemptions. “Recent market volatility has led to increased repurchase activity across private credit funds,” the firm stated. Other major players in the semi-liquid fund space, including Morgan Stanley, BlackRock, and Apollo Global Management, have similarly imposed limits in recent weeks, as asset markdowns impact performance.
Intensifying scrutiny on the multi-trillion-dollar private credit market stems from concerns over the health of loan portfolios and the potential impact of artificial intelligence on software companies borrowing from these funds. Such worries could erode earnings and weaken repayment capabilities, contributing to alternative asset managers’ compounded losses; Carlyle’s stock was down 1.5% in morning trading. A Carlyle spokesperson affirmed CTAC’s diversification, noting 950 positions with no single credit exceeding 1.5% of the portfolio, and assets under management rising 15% year-on-year. Direct lending constitutes around 40% of the portfolio, whilst software companies, accounting for 12% of holdings, have seen no defaults on their loans over the past five years. The fund’s structure, the spokesperson added, is designed to manage liquidity and avoid forced asset sales.
