Australian investors in private credit funds are facing a renewed test in the second quarter, as early filings indicate persistent redemption pressures. These pressures are largely driven by ongoing concerns regarding software exposure, asset valuations, and a lack of transparency within the asset class. Data from Reuters revealed that first-quarter redemptions across eight major vehicles reached approximately $7.1 billion, marking the highest figure in the dataset. With redemption windows recently closing for key U.S. non-traded private credit funds, market participants are closely monitoring withdrawal requests for signs of whether first-quarter trends are continuing.
Blackstone’s Private Credit Fund (BX.N) recently moved to cap withdrawals after investors sought to redeem 10% of outstanding shares in its second-quarter tender offer. This figure was double the fund’s stated 5% quarterly repurchase limit. The fund reported capital inflows equivalent to about 2% of net asset value (NAV), leading to a net outflow of roughly 3% of NAV. Despite this, the fund noted that repayments and inflows outpaced share repurchases. While BCRED successfully met all withdrawal requests during the first quarter, it observed that second-quarter repurchase demand eased later in the offer period, particularly among onshore investors.
Concurrently, the $31.3 billion Cliffwater Corporate Lending Fund informed investors that second-quarter redemption requests stood at 17% of shares, with redemptions capped at 5%. This represents an increase from the first quarter, when investors sought to redeem 14% of shares and redemptions were capped at 7%. The Cliffwater Corporate Lending Fund is structured as an interval fund, which periodically offers to repurchase shares from investors. It holds a diverse portfolio of approximately 4,000 assets, including direct loans to companies and stakes in funds managed by other investment firms.
