Creaky private credit sector continues to worry investors
WASHINGTON – An admired symbol of financial innovation in recent years, private credit has become a source of unease in US financial markets, and a subject of intensifying scrutiny. Leading firms have seen an acceleration of withdrawals from clients who had poured funds into non-banking financial firms as conventional banks pulled back on some vehicles... The post Creaky private credit sector continues to worry investors appeared first on New Era .
WASHINGTON – An admired symbol of financial innovation in recent years, private credit has become a source of unease in US financial markets, and a subject of intensifying scrutiny.
Leading firms have seen an acceleration of withdrawals from clients who had poured funds into non-banking financial firms as conventional banks pulled back on some vehicles after the 2008 financial crisis.
In the most recent example, asset manager Blue Owl, a big player in private credit, reported redemption requests of US$4.7 billion in the second quarter, only slightly less than the US$5.4 billion lodged in the first quarter.
In total, these requests amount to more than half the total in one of Blue Owl’s funds dedicated to private credit.
But like other firms faced with heavy withdrawal requests, Blue Owl limited withdrawals to five percent of the funds. In the first quarter of 2026, withdrawals from private credit funds overtook deposits in such funds, according to the Federal Reserve’s most recent report on financial stability.
