Financial turbulence in private lending markets is now affecting private equity firms, with major investment managers restricting client withdrawals this week. Swiss investment firm Partners Group, which manages approximately $185 billion in assets, implemented withdrawal limits after experiencing increased redemption requests driven by market-wide instability in private credit sectors that typically provide financing for private equity deals.
The asset management company cited growing withdrawal demands from its investment funds and acknowledged being impacted by industry-wide turbulence from private credit markets. Until now, such financial strain had been limited to specific situations in the equity sector, such as software company Medallia, which private equity firm Thoma Bravo is transferring to its creditors.
Declining share prices for Partners Group triggered similar drops among comparable firms across Europe and the United States, demonstrating widespread investor skepticism about the asset category.
Similar to other private investment platforms, Partners Group confronts obstacles to its accelerated expansion, as growing investor concerns about asset valuations, market transparency, and liquidity in private markets affect its growth path.
Reuters previously documented mounting concerns about Partners Group’s performance over several months, especially regarding its evergreen funds, an industry innovation created to provide clients with easier access to their investments.
Private credit investment funds are also facing ongoing withdrawal pressure during the second quarter of 2026.
Blackstone’s private credit fund limited withdrawals to 5% after receiving requests for 10% of outstanding shares. Likewise, Cliffwater’s $31.3 billion fund received 17% in redemption requests, which were also restricted to 5%.
These developments follow $7.1 billion in withdrawals across eight major investment vehicles during the first quarter, demonstrating continued investor interest in removing capital from private markets.
The swift growth of private credit has also stalled temporarily, with U.S.-focused direct lending activity dropping 40% to $44.76 billion in the second quarter of 2026. Market data shows reduced fundraising activity and heightened withdrawal requests from investors, indicating a cautious period for the sector.
This pattern may reduce revenue for private credit managers by restricting asset expansion and transaction fees, particularly as funds maintain cash reserves while managing withdrawal demands.
