Apollo Global Management has put a big ol’ cap on investor redemptions at its biggest non-traded private credit fund, Apollo Debt Solutions, like a kid with a cookie jar!
According to a shareholder letter-which I’m sure was written in invisible ink-redemptions are now capped at a mere 5% of outstanding shares after investors tried to pull out a whopping 11.2%. What’s next? A “please don’t go” party? The suspense is killing me!
Meanwhile, BlackRock decided to join the fun and slapped a 5% cap on its $26 billion HPS Corporate Lending Fund, just as withdrawal requests were knocking on the door at 9.3% of net asset value. It’s like a game of musical chairs, but instead of music, it’s just the sound of cash disappearing!
In a plot twist worthy of a soap opera, Blue Owl Capital also decided to end quarterly redemptions at Blue Owl Capital Corp II (OBDC II)-because who needs that kind of excitement? They’ve opted for periodic distributions funded by asset sales instead. “Surprise! Your money is now a treasure hunt!”
As the number of withdrawal requests rises like bread in an oven, investors are getting jittery about lenders’ heavy exposure to software companies-especially since those tech darlings are now feeling a little heat from artificial intelligence. I guess AI is the new kid on the block, stealing all the lunch money!
And as if things couldn’t get juicier, major financial institutions like Goldman and JPMorgan are offering hedge fund clients ways to short the private credit market. It’s like giving them the keys to the candy store but telling them all the candy is actually broccoli!
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The private credit crisis in 6 numbers:
1. Default rate hit 9.2% in 2025. The worst on record. Who knew failure could taste so sweet?
2. Fitch’s trailing 12-month default rate is at 5.8% and climbing as of January 2026-like a roller coaster that only goes up.
3. Morgan Stanley projects defaults rising to 8%. UBS says worst case: 15%. At this rate, we’re going to need more popcorn!
4. Consumer products…– MSB Intel (@MSBIntel) March 23, 2026
Meanwhile, Moody’s downgraded FS KKR Capital Corp. (FSK) from Baa3 to Ba1. Oh, the drama!
“The downgrade reflects FSK’s continued asset quality challenges, which have resulted in weaker profitability and greater net asset value erosion over time relative to business development company (BDC) peers. In simpler terms: ‘Things aren’t looking great, folks!’” The downgrade also notes other credit-negative characteristics of FSK’s credit profile, including leverage that’s higher than your Aunt Edna’s blood pressure. But hey, FSK is well positioned from a liquidity perspective-with sufficient available revolver capacity and well-laddered unsecured debt maturities. So, there’s that!
These developments are just the latest in a series of moves that confirm mounting stress across the private credit market. With rising redemption requests and AI-driven disruption pressuring the software loans that fueled the sector’s growth, the cracks are widening. It’s like watching a slow-motion train wreck-hard to look away, but you know you should!
How fund managers navigate the next quarter, as investor demands for liquidity collide with portfolios built on illiquid assets, will determine whether the stress remains contained or accelerates. Buckle up, folks, it’s going to be a bumpy ride!
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2026-03-24 11:11