Redemption limits at BlackRock, Blackstone, and Morgan Stanley highlight risks in the private credit market
Sectors & Industries
March 16, 2026
Table of Contents
Another area investors are watching closely is the private credit market — a fast-growing part of the financial system where large investment funds lend directly to companies instead of banks.
Several major firms have already restricted or halted withdrawals after investors rushed to pull money out. Funds connected to BlackRock, Blackstone, Morgan Stanley, Blue Owl, and Cliffwater have nearly all imposed redemption limits in recent months. For example, Morgan Stanley capped withdrawals at 5% of shares in one of its private income funds after redemption requests exceeded 10%, while Blue Owl halted redemptions in a technology-focused lending fund.
These restrictions matter because they reveal a key weakness in private credit: many of the loans cannot be easily sold. Unlike stocks or bonds that trade every day, private loans often sit on balance sheets for years. If too many investors want their money back at once, managers may be forced to freeze withdrawals or sell loans at steep discounts.
If that cycle accelerates, it can start to resemble a “run on the bank.” Investors see redemption limits and rush to withdraw funds before they are locked out, which forces managers to sell assets quickly and pushes loan prices even lower.
Part of the concern is where much of this money was lent. Software and technology companies became one of the largest sectors financed by private credit over the past decade, accounting for roughly 20–25% of the market because lenders liked their recurring subscription revenue.
Now that valuations are falling and artificial intelligence is disrupting parts of the software industry, many of those loans are becoming riskier.
Public software companies most exposed to tighter credit conditions include:
These companies often rely heavily on debt financing, venture funding, or private-equity-backed credit to fund expansion. If private credit tightens, it becomes harder and more expensive for them to refinance loans or raise new capital.
At the same time, the firms most directly exposed to stress in the lending market include private-credit managers such as:
If redemption pressure continues, the result could be forced loan sales, falling valuations, and tighter credit across private equity and software companies, spreading stress beyond private credit itself.
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