Private Credit Fund Locks Down Withdrawals as Investors Rush for the Door

Cliffwater restricted redemptions from its $31 billion lending fund to 5% per quarter after investors requested withdrawals totaling 17% of assets in Q2. The restriction—called a gate—lets managers sell loans in an orderly way rather than fire-sale prices. It exposes a core problem in the $2.4 trillion private credit sector: funds promise regular access to capital invested in loans that can't be quickly sold.