Every reporter: Li Lei Every editor: He Xiaotao, Xiao Ruidong, Yi Qijiang
As a core sector of alternative assets worth $2 trillion, the U.S. private credit market has been continuously plagued by a wave of redemptions since the first quarter of 2026.
There are still disagreements within the industry regarding the severity of this crisis, with much of the current debate on Wall Street focusing on whether investors are facing a crisis similar to that of 2008.
Some industry insiders have already sensed a hint of the &#34;2008 crisis.&#34; Morgan Stanley strategists emphasize that the current risks in private credit are limited to the industry level and do not constitute systemic risk, with limited spillover effects.
According to reporters from the Daily Economic News, the wave of redemptions in U.S. private credit is still fermenting. Recently, Morgan Stanley issued a warning: as the continuous development of artificial intelligence technology impacts the software industry, the private credit market is preparing for a new round of pressure, with default rates expected to rise to around 8%.
The analyst team led by Joyce Jiang stated that although the impact of artificial intelligence on private credit has not yet formed a substantial shock, potential risks are rapidly accumulating, especially related to loans in the software industry. High leverage and weakening cash flow coverage may push default rates to their highest levels in recent years.
It is worth mentioning that just a few days ago, both Morgan Stanley and Cliffwater LLC set redemption limits for their debt funds, which amount to billions of dollars, due to the amount of redemption requests from investors exceeding the usual quarterly limits.
According to the Financial Times, in the first quarter of this year, some large private credit funds collectively faced over $10 billion in redemption requests, involving institutions such as Blackstone, BlackRock, Cliffwater, Morgan Stanley, and Monroe Capital.
Professionals analyze that leading institutions like Blackstone and Blue Owl have previously adjusted redemption rules and sold assets due to redemption pressure. Coupled with Fitch Ratings revealing that the U.S. private credit default rate has reached a new high since August 2024, as well as external factors such as conflicts in the Middle East and expectations of economic slowdown, market risk aversion towards the industry continues to rise, and issues such as liquidity mismatches and inadequate information disclosure accumulated during the industry's development are also being exposed.
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<h2>AI Reshaping the Software Industry Ecosystem</h2>
<h2>Private Credit Facing Default Pressure Test</h2>
Recently, Morgan Stanley clearly pointed out in a report that as the industry transformation triggered by artificial intelligence reshapes the software industry, the private credit market is preparing for a new round of pressure. The direct loan default rate is expected to rise to around 8%, a level close to the peak default rate during the COVID-19 pandemic.
According to the report, the credit fundamentals of loans in the software industry are the weakest across the entire industry, exhibiting dual pressures of high leverage and low debt service coverage. The Joyce Jiang team wrote in the report that software loans have the highest leverage levels and the lowest interest coverage ratios among major industries, with cash flow coverage continuing to weaken and debt repayment capabilities significantly under pressure
At the time this warning was issued, the global credit market was struggling to cope with the impact of artificial intelligence on corporate business models, particularly in the software industry. For a long time, the software industry has been a favored area for private credit investors due to its stable revenue and high profit margins.
Over the past decade, alternative asset management firms have significantly increased their risk exposure to software companies. According to Morgan Stanley, this sector currently accounts for about 26% of the portfolios of non-public business development companies (BDCs). The exposure to the software industry in private credit collateralized loan obligations (CLOs) is also substantial, at around 19%, with a large volume of loans set to mature soon.
According to global financial tracking firm PitchBook, the debt maturity of direct loans in the software industry exhibits a &#34;front-heavy, back-light&#34; characteristic: 11% of loans are due by 2027, and the proportion due in 2028 rises further to 20%. If market liquidity tightens and lenders' risk appetite declines, the refinancing costs for software companies will rise significantly, and the difficulty of extending debt maturities will directly increase default risks.
Under the risk warning, market liquidity pressures have already begun to manifest. Just last week, Morgan Stanley and Cliffwater LLC set redemption limits on their multi-billion dollar private debt funds, becoming another case of liquidity tightening in the industry. Both institutions stated that the core reason for triggering the limits was that the scale of investor redemption requests far exceeded the usual quarterly limits, making it difficult for the funds to meet all redemption demands without impacting asset prices.
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A wave of billions in redemptions sweeps through asset management giants
Market participants assess risk boundaries
The redemption limits set by Morgan Stanley and Cliffwater are not isolated incidents.
According to the Financial Times, in the first quarter of 2026, private credit funds under leading institutions such as Blackstone, BlackRock, and Morgan Stanley received a total of $10.1 billion in redemption requests, with institutions only fulfilling about 70% of these requests, forcing the remaining portion to be deferred.
Among them, BlackRock's $26 billion HPS Corporate Loan Fund faced a 9.3% redemption request but only executed a 5% quarterly redemption limit; Blackstone's flagship private credit fund, with $82 billion in assets, saw redemption requests reach 7.9% in a single quarter, setting a new high.
The redemption pressure has transmitted to the capital markets, directly triggering a collective decline in the stock prices of related targets. Since March (as of March 16), Blue Owl Capital's stock price has fallen by a cumulative 16.97%, with a year-to-date decline exceeding 40%, and Ares Management also dropped more than 10% this March. On March 6 alone, BlackRock's stock price plummeted by 7.17%, while Blue Owl Capital, KKR, and Ares Management fell by 5.09%, 4.46%, and 6.01%, respectively
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It is worth mentioning that on March 11, KKR publicly stated that direct loans account for 5% of its assets under management, and the company's recent poor performance is mainly due to legacy investments and non-first lien investments. &#34;Core operating metrics have not shown substantial slowdown,&#34; said the company's Chief Financial Officer Robert Lewin. From the market performance in the past two days, KKR's stock price shows signs of stabilizing and rebounding.
There is still disagreement within the industry regarding the severity of this crisis, with much debate on Wall Street currently focused on whether investors are facing a crisis similar to that of 2008. Some industry insiders have already sensed a hint of the &#34;2008 crisis.&#34;
In response to market panic, multiple institutions have assessed the boundaries of risk. Morgan Stanley strategists emphasized that the current risks in private credit are limited to the industry level and do not constitute systemic risk, with limited spillover effects. The report pointed out that the liquidity constraints in private credit effectively block risk transmission, and the banking sector's exposure to this area is defensive, preventing a repeat of the 2008 subprime mortgage crisis.
Huatai Securities also noted that private credit is currently in an industry clearing phase, and short-term pressure will persist. However, under the baseline scenario of a soft landing for the U.S. economy, systemic spillover risks are generally controllable, resembling more of a &#34;storm in a teacup&#34; (i.e., localized industry risk).
Some market participants also warned that the disruption caused by AI in the software industry has long-term and uncertain implications, and the reconstruction of revenue models for software companies will continue to affect credit quality. Additionally, the increased proportion of retail investors leading to liquidity fragility may further exacerbate market volatility, signaling the potential end of the rapid growth phase in the private credit market over the past decade.
As of now, redemption restrictions are still in place. In the next two weeks, as institutions such as Ares Management, Apollo Global, Blue Owl, Oaktree, and Goldman Sachs complete their statistics, the scale of redemptions is expected to rise, and the liquidity test in the private credit market is not yet over.
Reporter | Li Lei****
Editor | He Xiaotao, Xiao Ruidong, Yi Qijiang****
Proofreader | Duan Lian
Cover image source: Visual China
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The U.S. private credit market has been facing a wave of redemptions since the first quarter of 2026, with internal disagreements about the severity of the crisis. Morgan Stanley warns that the default rate is expected to rise to around 8%, particularly for loans related to the software industry. Recently, some large private credit funds have encountered redemption requests exceeding $10 billion, intensifying the market's risk-averse sentiment towards the industry

腾讯新闻 - 财经

Putnam BDC Income ETF

VG Financial

SPDR S&P Software

iShares Expanded Tech Software Sector ETF

VanEck BDC Income ETF

Pro Gbl Listed Pvt

Fidelity MSCI Financials Index

Morgan Stanley

Middle East conflict, U.S. private credit defaults hitting new highs... The wave of redemptions in private credit funds continues, with giants only redeeming about 70%, and Wall Street senses the smell of the "2008 crisis"?