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Private Credit Investors Rush to Withdraw

The rush for the exits in private credit is prompting fresh scrutiny of the sector’s less-liquid structures and its rapid expansion into the retail wealth space.

Blackstone has become the latest fund manager to be hit by a surge in requests from investors to withdraw from its flagship private credit strategy.

The asset manager said this week it will meet 100% of redemption requests in its gigantic $82 billion Blackstone Private Credit Fund, or BCRED, after investors sought to pull a record 7.9% of assets from the fund, or about $3.8 billion.

That came after Blue Owl Capital said last month it was ending regular quarterly liquidity payments in its Blue Owl Capital Corporation II fund, a semi-liquid private credit strategy aimed at U.S. retail investors. The private credit specialist will instead switch to periodic payouts funded by asset sales, earnings and other strategic deals.

This spike in redemption requests is now putting the private market industry’s courting of retail investors under closer scrutiny, and bringing the mismatch between non-publicly-traded, higher-yielding illiquid assets and retail-style access into sharper focus.

‘A feature, not a bug’

Blackstone — the world’s biggest alternative investment manager, with $1.27 trillion in assets under management — said it was upping a previously-announced tender offer to 7% of total shares, with the firm and employees offsetting the remaining 0.9%, in order to meet the redemption requests in full.

Blackstone Chief Operating Officer and President Jon Gray acknowledged that the risk of private credit firms failing to meet withdrawals, and potentially gating investors’ money, is “not beneficial in the near term” for the sector.

But speaking with CNBC’s “Squawk On The Street” Tuesday, Gray said individual investors and financial advisors “in most cases do” understand the product.

“What people sometimes fail to recognize is, they’re designed as semi-liquid products,” Gray said. “The idea that there are caps is really a feature, not a bug of these products. What you’re doing is trading away a bit of liquidity for higher returns. That’s the same trade-off institutional investors have made for a long period of time.”

Shares of publicly traded alternative asset managers — including Blackstone and Blue Owl, as well as KKR, Ares Management and Carlyle Group, among others — have dipped as concerns over multiple pressure points in the sector have spread.

These include late-cycle loan quality, AI-related risks in software portfolios, and fears of further individual blow-ups following the First Brands and Tricolor implosions last year.

Gray said that lowly-leveraged loans which produce a premium for investors are “a pretty good place to be,” adding that he expects they will continue to outperform liquid credit.

The BCRED fund has generated a 9.8% return since inception in its main share class, which indicates that, for now, the challenge remains one of liquidity rather than performance. Gray said there had been a “ton of noise” around private credit in recent weeks, adding, “it’s not a surprise that investors can get nervous.”

Moody’s Ratings warned that private credit’s tricky balance between delivering outsized returns while also offering retail-like liquidity will continue to be tested as the sector evolves towards the mainstream. In a recent commentary, Marc Pinto, global head of private credit at Moody’s, said funds may need to hold a larger proportion of more liquid, lower‑yielding assets to account for a growing retail presence — which could prove a drag on returns.

’180-degree switch’

Ultimately, the underlying assets will remain illiquid, regardless of the fund’s structuring, said William Barrett, managing partner at Reach Capital. “The retail market has to be conscious of that and not invest in these products the same way it would in an ETF,” Barrett told CNBC via email.

“Private markets inflows have been dominated by the institutional market for decades,” Barrett said. “It makes sense for our industry to now offer our products to retail but we should probably test it first with HNWI [high net worth individuals] and mass-affluent segments rather than making a 180-degree switch to mass retail.”

Barrett said the industry has to carefully select the right target markets for the right liquidity structures and the right underlying assets.

He noted that while there has been little sign of underperformance in the credit space at the portfolio level, “it makes sense that semi-liquid products feel the liquidity pressure first.”

Man Group, the London-listed global alternatives manager which has expanded its private credit activity in recent years,said private credit loans are originated with the “express purpose” of being held to maturity.

“This lack of tradability is a feature of the asset class, not a flaw,” said Andrew Weymann, director, client portfolio manager, U.S. private credit, and Zeshan Ashfaque, senior managing director and senior credit officer, U.S. direct lending, in a note Tuesday.

They said redemption pressure in private credit could also be influenced by another area of weakness: exposure to software-as-a-service companies. Blue Owl is a significant direct lender to the sector, which has been shaken by concerns that rapidly advancing AI tools could erode traditional SaaS business models.

“If retail inflows slow and outflows pick up, particularly for managers most exposed to AI risks or whose capital bases have a significant retail component, this will be an additional headwind for the industry to contend with,” Weymann and Ashfaque noted.

CNBC

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Dubai gold rises for a third day after its worst month since 2008.

Dubai gold prices moved higher early Wednesday, extending a short-term rebound after a sharp correction through March that unsettled buyers and traders alike.

At 8:22 am, 24K gold stood at Dh566.75, up from Dh563.25 a day earlier, while 22K rose to Dh525 from Dh521.50. (Check latest UAE gold prices here, alongside prices in Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, and India.)

The uptick follows a volatile month where prices dropped nearly 12%, marking the steepest monthly decline since October 2008. That slide has reset expectations across the market, with buyers returning in phases rather than rushing in.

Peak to pullback

Gold had surged to levels above $4,700 an ounce in recent sessions, recovering from a broad sell-off triggered by rising US Treasury yields and a stronger dollar.

The shift in direction reflects a wider change in market positioning. Investors who once turned to gold for protection during geopolitical stress instead moved toward yield-bearing assets, particularly as expectations of interest rate cuts faded.

Ahmad Assiri, Research Strategist at Pepperstone, said gold’s behaviour through March marked a clear break from its traditional role.

“Gold’s failure to serve as a safe haven throughout March highlights a dramatic shift in the global macro landscape,” he said.

He added that rising yields and a stronger dollar “forced a painful downside repricing of the yellow metal,” with investors moving away from expectations of monetary easing and pricing in tighter conditions.

War outlook shifts sentiment

Recent gains have been supported by signs that tensions in the Middle East may ease, with market attention shifting from immediate conflict risks to longer-term economic implications.

Comments from US President Donald Trump suggesting a potential resolution within weeks have lifted equities and softened the dollar, creating space for gold to stabilise.

Bond traders have also reduced bets on aggressive rate hikes, focusing instead on growth risks tied to the conflict. That recalibration has helped bullion regain some ground, though conviction remains limited.

Buyers weigh timing

Despite the rebound, the broader trend still reflects caution. Prices remain well below mid-March peaks, when 24K gold crossed Dh600, highlighting the scale of the recent correction.

Assiri pointed to deeper structural shifts shaping demand.

“The market chose the yield of the dollar and the volatility of oil over the safety of gold,” he said, noting that capital moved toward assets offering stronger returns during the height of uncertainty.

That dynamic is likely to keep buyers selective in the near term. Jewellery shoppers and investors in the UAE are watching for clearer signals on rates and geopolitical stability before committing in size.

Outlook steadies, but not settled

Some global banks continue to maintain a constructive view on gold over the longer term, citing central bank demand and the possibility of rate cuts later this year.

Still, the near-term outlook remains tied to macro signals. Movements in yields, the dollar and energy markets are now playing a more decisive role than geopolitical headlines alone.

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China Suppliers Warn US Prices to Rise Over Hormuz Closure

Pickleball paddle producer Devi Wei has a message for U.S. shoppers.

“Americans will have to pay more,” the Chinese businessman told CNBC at a Beijing trade show last week at the China International Exhibition Center.

Because of the recent swings in oil prices resulting from the Iran war and closure of the Strait of Hormuz, Wei, who founded his own exporting business, Huijin Trade, has had to hike prices on his paddles and pickleballs by as much as 20%, he said.

Wei’s goods are made with polypropylene, a plastic material derived from oil and made in the Middle East, a dominant producer in the global industry. The war in Iran has stalled shipments of oil and its products through the Strait of Hormuz, raising concerns among Chinese manufacturers at the trade fair about further disruption across the global supply chain.

“I might have to go even higher,” Wei said. “Maybe double if the Iran war doesn’t stop soon.”

Surging oil prices are filtering into prices of all kinds of products that rely on the commodity for manufacturing.

James Li, who makes scarves and said he sells a third of his inventory to the U.S., has marked up his polyester products by 5%.

“This scarf is 30% polyester,” Li told CNBC from his trade show booth. “We will definitely pass on the extra cost to our customers.”

Wang Mingming, a general manager of toy manufacturer Jinming Gifts, said he is hoarding two months’ worth of the plastic polymer PVC, but isn’t sure he can hold off charging more for his figurines.

“In our industry, these materials are almost irreplaceable,” Wang said. “If oil prices rise any further, we really won’t be able to manage.”

Cameron Johnson, senior partner at Shanghai-based supply chain consultancy Tidalwave Solutions, said he foresees competition for oil-related products among entire sectors if the crisis at the Strait of Hormuz isn’t resolved soon. A prolonged impasse in the critical waterway also raises the possibility of product shortages.

“If this goes on into May, everyone will be in big trouble and there will be triage between industries,” Johnson said, predicting autos and the medical field would be granted higher priority. “There is no visibility when new supply will come.”

Perhaps the biggest worry among China’s manufacturers is what costlier oil will mean for discretionary spending by consumers worldwide.

More money for gas means less for Wei’s pickleballs.

“Ordinary people are getting squeezed the most from the high oil price,” he said. “Their spending power just isn’t what it used to be.

CNBC

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Dubai gold dips again as global pressures cool recent rally

Gold prices in Dubai eased on Thursday morning, giving shoppers a small breather after several sessions of elevated prices earlier this month.

The 24-karat rate stood at Dh619.75 per gram at around 9.30 am on Thursday, down from Dh623.75 recorded a day earlier. The 22-karat price dropped to Dh574, down from Dh577.50 on Wednesday.

The decline reflects broader global moves in bullion markets after recent US economic data shifted expectations for interest rates and strengthened the dollar.

Recent price swings

Gold prices in Dubai have moved sharply through February and early March, showing how quickly global events are feeding into local jewellery rates.

Mid-February levels were closer to Dh600 per gram for 24-karat gold, with prices around Dh596 on February 12 before gradually climbing above Dh600 in the following days. The rally gathered pace toward the end of the month when prices moved past Dh620, and by February 28, the 24-karat rate had climbed to around Dh636.

The start of March saw an even sharper surge, with prices briefly jumping above Dh640 on March 2, marking one of the highest levels seen this year. Gains proved short-lived. Rates pulled back in the following sessions, falling toward the Dh615 range by March 9 before rebounding again above Dh620 earlier this week.