"Unprecedented" Withdrawal Requests Just Paralyzed One Firm

The private credit disaster continues to snowball...and at the worst possible time.

Moments ago, it was reported that one private credit company has effectively frozen up under a wave of redemption requests, an abrupt liquidity crunch that will likely do lasting damage to what little credibility it still had with investors.

This is exactly the kind of stress event I’ve been expecting ever since I flagged that psychology in the private credit space was starting to break—and I still believe conditions in private credit will get worse before they get better.

I’ve been flagging the sector as one of ten that I see as an avoid at all costs, and just days ago I wrote that conditions were worse than they appeared on the surface. This latest development only reinforces that view.