Cliffwater and Blackstone Private Credit Funds Restrict Redemptions

According to Bloomberg, Cliffwater's flagship private credit fund has again limited redemptions to 5% after investors sought to withdraw approximately 16% of shares in the third quarter. Blackstone Private Credit Fund, the largest business development company (BDC) of its kind with $77 billion in assets, also announced on Thursday that it would cap redemptions at 5% after investors requested to redeem 10% of shares. These developments indicate ongoing liquidity pressures in the private credit market. Fund managers resort to such restrictions to maintain fund stability against sudden and high-volume redemption requests. Investor demands can strain the process of converting fund assets into cash through sales, prompting managers to decline redemption requests above a certain threshold and defer the remaining requests to the next period. This situation serves as a reminder that investors in private credit funds must consider liquidity risk. This is not investment advice.