"Investors requested $19.5 billion from private credit direct lending funds in the first quarter, but firms only paid out 53% of requests, totaling $10.4 billion."
"Nine funds decided to cap investor withdrawals to the maximum amount they are required to pay out per quarter, either 5% or 7%, indicating faltering confidence."
"Concerns mount about exposure to software loans in the age of generative AI and the difference between private and public market valuations."
"Private credit, or loans written by non-bank lenders, has been one of the fastest-growing asset classes, particularly in direct lending to businesses."
In the first quarter, investors requested $19.5 billion from private credit direct lending funds, but only $10.4 billion, or 53%, was paid out. Nine funds capped withdrawals at 5% or 7%, reflecting declining confidence in non-traded private credit funds. Concerns about exposure to software loans and valuation differences between private and public markets are rising. Despite some withdrawals, other investors continue to invest, potentially leading to smaller net outflows or even net inflows. Private credit remains a rapidly growing asset class, particularly in direct lending to businesses.
Read at www.businessinsider.com
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