Cliffwater has restricted investor withdrawals from its flagship $31bn private credit fund after redemption requests climbed to 17% in the second quarter, highlighting intensifying pressure across the private credit industry, according to a report by the Financial Times.
The firm limited redemptions to 5% of outstanding shares – equivalent to roughly $1.6bn – after investors sought to pull more than $5bn from the vehicle. The latest figures mark an increase from the prior quarter, when redemption requests stood at 14%, underscoring a steady rise in investor caution.
The fund, which targets retail investors through wealth management channels, sits at the centre of broader stress in private credit markets, where concerns over loan quality and exposure to vulnerable sectors have driven a wave of withdrawals. Sentiment has been further weighed down by fears that artificial intelligence could disrupt parts of the software industry, a key borrower base for private lenders.
Cliffwater was among the fastest-growing players during the private credit boom, as wealth advisers increasingly allocated client capital into evergreen-style funds offering periodic liquidity. However, these semi-liquid structures are now facing strain as redemption demand accelerates.
Like many peers—including major alternative asset managers—Cliffwater has implemented gating measures to manage outflows and prevent forced asset sales. The fund’s structure includes exposure to more than 4,000 loans, along with investments in other private credit vehicles, helping diversify risk across its portfolio.
Despite recent pressure, the fund has continued to generate positive returns, reporting an 8.05% gain over the past year, including 1.7% year-to-date. Management said the liquidity controls are designed to balance investor access with the long-term nature of the underlying assets.
