Private-Credit Funds Buckle Under $20 Billion Redemption Wave

Investors withdrew $20 billion from private-credit funds in Q1 2026. Some funds faced redemption requests hitting 41%—eight times their normal 5% quarterly cap—leaving backlogs that would take two years to clear. Managers paid out only 70% of what investors requested. Defaults and fading appetite for risk exposed liquidity gaps in products sold as safe alternatives to public bonds.