Odaily Planet Daily report: As investor concerns over private credit risk intensify, several major Wall Street banks and private credit funds are taking measures to address potential pressures. Some U.S. banks have tightened lending standards for private credit, while funds have restricted investor redemptions. According to Moody’s data, as of June 2025, U.S. banks had extended nearly $300 billion in loans to private credit, an additional $285 billion to private equity funds, with $340 billion in undrawn commitments. Market concerns stem from valuation issues, lack of transparency, and risks exposed by bankruptcies such as those of First Brands and Tricolor. Analysts note that investors remain skeptical about exposure to software and technology assets, compounded by liquidity constraints, suggesting that the short-term private credit market may continue to face pressure. Key actions by Wall Street banks and private credit funds include:
JPMorgan Chase has lowered its valuation of certain private credit loans tied to the software sector and is reducing further lending.
2. Morgan Stanley restricted redemptions for the North Haven Private Income Fund, fulfilling only about 45.8% of investor requests in the first quarter to avoid market misalignment.
3. BlackRock imposed a 5% redemption limit on the HPS Corporate Lending Fund; in the first quarter, $1.2 billion in redemption requests were submitted, but only $620 million was paid out.
4. Blackstone's BCRED fund saw net redemptions of $1.7 billion in its first quarter, with employees contributing $400 million to cover the gap, raising the quarterly redemption cap from 5% to 7%.
5. Blue Owl Capital sold $1.4 billion in assets to repay investor funds and permanently suspended redemptions for one fund.
6. Cliffwater limits fund quarterly redemptions to 7% to address approximately 14% in investor redemption requests during the first quarter. (Reuters)