The private‑credit market has hit a rough patch in recent months, with weakening investor sentiment and rising redemption requests at non‑traded business development companies (BDCs) signaling mounting stress.
Michael Lebowitz, a portfolio manager at RIA Advisors, believes that the “chaos and bad press” surrounding private credit has dragged down both strong and weak players in the sector.
“The poor sentiment toward private credit funds has dragged down many high-quality BDCs, as well as weaker ones. The chaos and bad press surrounding private credit funds are not reasons to avoid BDCs. In fact, we think it’s a reason to consider it,” Lebowitz wrote on X.
According to a recent Bank of America report as cited by PitchBook, redemption activity in BDCs will reach its highest point in the second quarter of 2026, following record levels seen in the first quarter.
The increase will continue into the second quarter as “advisors request more than needed in reaction to the prorations,” which capped withdrawals at roughly 5% across most BDCs. As a result, some investors are expected to attempt to recover unmet redemption requests from the prior quarter, the report stated.
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