Bonds issued by semi-liquid private credit funds had already been under pressure before recent investor redemptions, highlighting underlying stress in the $2tn sector, according to a report by Reuters citing analysis by Fourier Asset Management.
The hedge fund said spreads on bonds from major interval funds, including those managed by Oaktree Capital, BlackRock, Blue Owl, Blackstone, and Ares Capital, had widened sharply since early February, signalling rising investor concern over liquidity and valuations even before withdrawals surged.
Interval funds, which allow investors periodic redemption windows, often restrict withdrawals to prevent large redemptions from eroding remaining investors’ share values. Fourier’s analysis shows that bond spreads for these funds had been narrowing in mid-2025 and early 2026 but began widening significantly in February. Oaktree’s Strategic Credit Fund, for example, saw spreads reach approximately 250 basis points, near their highest since April 2025, while BlackRock’s HPS Corporate Lending Fund widened to roughly 258 basis points in March.
Fourier says the market is navigating its most severe stress test since inception, with bond market signals preceding some of the redemption activity observed this month.
The semi-liquid private credit market has been facing mounting scrutiny as investors grow wary of valuations, transparency, and broader economic risks. Some funds have already imposed caps on withdrawals to manage the impact of redemption requests. Fourier itself does not hold positions in these specific funds but takes long and short positions across the broader credit market.
