Post by AlternativeSoft

There is one number at the centre of every semi-liquid private credit fund: 5%. That is the quarterly redemption cap — the share of NAV that investors can withdraw in any given quarter. It is also, as the first quarter of 2026 has made clear, exactly where the liquidity promise ends. Blackstone's BCRED received redemption requests equivalent to nearly 8% of its $47 billion NAV in a single quarter. Ares Management gated after requests hit 11.6%. Cliffwater at 14%. Morgan Stanley's Northaven fund at 11%. In each case, investors who believed their capital was 'semi-liquid' discovered that the term describes conditions — not a right. A few structural dynamics this period has surfaced that deserve more attention: → The inflow cushion that made semi-liquid structures work for five years has gone. When $74bn of annual inflows funded redemptions organically, the liquidity mismatch was invisible. When inflows dropped more than a third in early 2026, the mismatch became structural → The shift in the investor base matters enormously. Evergreen vehicles have moved from roughly 68% institutional in 2020 to ~62% retail/wealth channel in 2025. Institutional LPs with genuine long-horizon capital are now partially exposed to the redemption behaviour of investors with very different time horizons and triggers → Redemptions as a share of NAV in BDCs with over $1bn AUM rose 217% quarter-on-quarter in Q4 2025, per Robert A. Stanger & Company, Inc. The gate mechanism that was designed to protect the fund penalises all investors equally — including those with no intention of exiting The right response is not to exit private credit. It is to build a liquidity framework that treats the structural mismatch as a first-order risk to be modelled — not a secondary feature to be assumed from the product documentation. We've written a piece working through what that framework looks like, what the current stress reveals about the semi-liquid structure, and what institutional allocators should be examining in their private credit books right now. Full article: https://lnkd.in/eh6Z7DWW Relevant coverage and data: Bloomberg Financial Times CNBC PitchBook Morningstar. Industry context: AIMA - The Alternative Investment Management Association CAIA Association Preqin. #PrivateCredit #LiquidityRisk #AlternativeInvestments #Allocators #Evergreen #BDC #InstitutionalInvesting