Reuters: Panic in the private credit market spreads to Wall Street, with several banks and funds restricting redemptions.

As investor concerns about private lending risks intensify, several Wall Street banks and private lending funds have taken measures to address potential pressure. Some US banks have tightened lending to private lending, while funds have restricted investor redemptions. According to Moody’s data, as of June 2025, US banks had provided nearly $300 billion in loans to private lending, with another $285 billion lent to private equity funds, leaving $340 billion unused. Market concerns stem from valuation and transparency issues, as well as the risks exposed in private lending during the bankruptcies of First Brands and Tricolor. Analysts point out that continued investor skepticism about software and technology asset exposure, coupled with tight liquidity, may keep the private lending market under pressure in the short term. Key actions taken by Wall Street banks and private lending funds include: 1. JPMorgan Chase downgraded the valuation of some private lending loans involving the software sector, reducing further lending. 2. Morgan Stanley restricted redemptions for the North Haven Private Income Fund, fulfilling only about 45.8% of investor applications in the first quarter to avoid market mismatch. 3. BlackRock imposed a 5% limit on redemptions for its HPS Corporate Lending Fund, which received $1.2 billion in redemptions in the first quarter but only disbursed $620 million. 4. Blackstone's BCRED fund experienced net redemptions of $1.7 billion in the first quarter, but raised $400 million in employee funding to fill the gap and increased 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 limited quarterly redemptions to 7% to address approximately 14% of investor redemption requests in the first quarter. (Reuters)