Shares of major alternative asset managers including KKR & Co., Ares Management Corp., and Blackstone Inc. declined sharply in premarket trading Wednesday after Partners Group Holding AG, a Swiss private markets firm, moved to limit investor withdrawals from one of its flagship funds. The action reignited concerns about liquidity across the $1.8 trillion private markets industry, which has faced mounting redemption requests from retail and private wealth clients.
Partners Group, which manages roughly $185 billion from Zurich, said it would cap redemptions from its $8.6 billion Global Value SICAV fund at 5% of net asset value per quarter. The fund, an evergreen vehicle that permits periodic withdrawals, received redemption requests totaling an estimated 9.8% of NAV in the second quarter, according to a letter to investors cited by Bloomberg News. Partners Group shares plunged 17.7% on the day, touching a 52-week low.
The news rippled through U.S.-listed alternative managers. KKR fell 6.8% before the open, Ares Management dropped nearly 6.7%, Blackstone declined 5.2%, and Blue Owl Capital Inc. slid 5.2%, according to CNBC. Carlyle Group Inc. edged down 2.9%. The selloff underscored how a liquidity squeeze that had been largely contained to private credit is now spreading to other private asset classes.
Partners Group Chief Executive David Layton told Bloomberg Television that redemption pressure, first seen in credit vehicles, is broadening. “There are some idiosyncratic factors for this fund in particular, but indeed you do see investors broadly, after having redemption pressure within private credit for a number of quarters, now starting to redeem other asset classes,” Layton said. The trend has been building: in the first quarter, redemption requests across U.S. non-traded private credit funds reached as high as 41% of some funds’ NAVs, according to Reuters, prompting most managers to enforce the standard 5% quarterly cap.
Wealthy individual investors have driven much of the selling. With shorter time horizons than institutions, this cohort has proven more sensitive to negative headlines, including concerns about AI disruption to software borrowers and the fundamental liquidity mismatch in semi-liquid fund structures. Blackstone’s $82 billion private credit fund faced record redemption requests in the first quarter, with clients seeking to redeem close to $3.7 billion, or 7% of shares. Similar caps were imposed by funds at BlackRock, Blue Owl, Morgan Stanley, and Apollo.
Cliffwater, a major manager of retail-accessible private credit vehicles, disclosed Tuesday that its $31.3 billion Corporate Lending Fund received withdrawal requests equal to roughly 17% of shares in the second quarter, up from 14% in the first quarter, according to Bloomberg. The fund capped redemptions at 5%, meaning investors received less than 30 cents for every dollar sought. TD Cowen analyst Bill Katz told Reuters that the update could push a sector recovery past Labor Day, with elevated redemptions potentially lingering until year-end. Senior executives at the Bernstein Strategic Decisions Conference in New York last week predicted redemption requests in private credit would remain high through 2026.
Against this backdrop, federal scrutiny is intensifying. Jay Clayton, U.S. Attorney for the Southern District of New York and former SEC chairman, told the Bloomberg Global Credit Forum on Wednesday that his office is examining how asset managers value private assets. “Regarding marks and transparency of marks, we can do a better job,” Clayton said, as per Reuters. He noted that when multiple participants hold the same asset at different marks, questions arise, “particularly if they’re making fees.” Clayton added that his team is looking at whether managers mark assets differently across separate portfolios. “We can eliminate the question of whether people are marking something in book A at 100 and book B at 90,” he said. The scrutiny reflects longstanding unease about the valuation of illiquid private assets, which are marked infrequently and with significant discretion. Clayton said large financial institutions have been cooperative.
For financial advisors, the developments underscore the risks of semi-liquid private market funds. As redemption pressures persist, advisors may need to reassess client allocations and communicate the potential for liquidity constraints. For more on the liquidity strain in private credit, see our earlier coverage: Blackstone BCRED Sees 10% Redemption Requests, Signaling Liquidity Strain for Private Credit Funds. Additionally, the broader private equity recovery faces headwinds, as detailed in Bain Midyear Report: Triple Shock Derails Private Equity Recovery as 33,000 Companies Languish. Advisors seeking to navigate these markets may find strategies in Bucketing and Private Markets: How Advisors Keep Clients Steady Through Volatility.
