June 3 (Reuters) – Shares of U.S. alternative asset managers fell in premarket trading on Wednesday as investors braced for second-quarter updates on redemptions from non-traded private credit funds, after withdrawals spiked in the prior quarter as concerns rose about liquidity in the fast-growing sector.
Apollo Global Management, Ares Management, Blackstone, Blue Owl Capital and KKR fell over 5% each, while Carlyle Group slipped 2.8%.
Redemption windows at key U.S. non-traded private credit funds for the second quarter began closing last Friday. The closures will be spread across June, and market participants are keeping a close eye on subsequent updates on the rate of withdrawal requests.
Cliffwater was the first to report second-quarter redemptions on Tuesday, with withdrawal requests at its flagship $31.3 billion private credit fund worsening to 17% from 14% in the first quarter.
Wealthy individuals have sought to pull their money from private credit funds in recent months as a slew of negative headlines around the asset classes, liquidity limits and worries around AI disruption to software firms unnerved investors.
Analysts said the Cliffwater update could potentially delay the sector’s recovery beyond Labor Day as investors await redemption headlines.
If the next few updates don’t show improvement, the slowdown could linger till the end of the year, TD Cowen analyst Bill Katz said.
Redemption requests across U.S. non-traded private credit vehicles had shot up as high as 41% in the first quarter, prompting most managers to enforce the typical 5% limit on withdrawal requests, curtailing liquidity for investors.
Analysts have backed the move to limit withdrawals as it would help mitigate the risk of forced asset sales.
Top asset management executives who gathered at the Bernstein Strategic Decisions Conference in New York last week said redemption requests in private credit vehicles were expected to remain high throughout the year.
Switzerland’s Partners Group on Wednesday said it was capping withdrawals from an $8.6 billion private equity fund as redemption requests accelerated, a sign that investor worries about private credit are spilling over into other parts of the markets.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Sahal Muhammed)
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