Shares of KKR, Ares, and Blackstone fell sharply in premarket trading Wednesday after Switzerland's Partners Group Holding AG moved to restrict investor withdrawals from one of its flagship private equity funds, deepening concerns about liquidity across the $1.8 trillion private markets industry.
Partners Group, which oversees approximately $185 billion in assets from its base in Zurich, Switzerland, said it was capping redemptions from its $8.6 billion Global Value SICAV fund – a so-called evergreen private equity vehicle that allows periodic investor withdrawals – at 5% of net asset value per quarter.
According to CNBC, the move came after withdrawal requests reached an estimated 9.8% in the second quarter, well above the fund's standard threshold, according to a letter to investors reported by Bloomberg News. Partners Group shares plunged 17.7% on the session, touching a 52-week low.
The announcement rippled quickly across U.S.-listed alternative asset managers. KKR shares moved 6.8% lower before the open, while Ares Management dropped nearly 6.7%, Blackstone fell 5.2%, and Blue Owl Capital Inc. slid 5.2%, according to CNBC. Carlyle Group Inc. edged down 2.9%.
For months, the liquidity squeeze had been largely contained to private credit – the broad category of non-bank lending that boomed over the past decade. But Partners Group Chief Executive David Layton sees wider contagion taking place, telling Bloomberg Television that the redemption pressure first seen in credit vehicles is spreading into other asset classes.
"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 arc of the crisis has been steep. In the first quarter, redemption requests across U.S. non-traded private credit vehicles reached as high as 41% of some funds' net asset values, according to Reuters, prompting a majority of managers to draw a hard line around the standard 5% quarterly withdrawal cap.
Wealthy individual investors – the retail and private wealth clients that alternative asset managers have spent years courting – have driven much of the selling pressure. With much shorter time horizons than large institutions, that cohort has proven more likely to retreat on negative headlines, concerns about AI disruption to software company borrowers, and what analysts describe as a fundamental liquidity mismatch built into semi-liquid fund structures.
That mismatch has become impossible to ignore. In one of several headline-grabbing episodes, 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 the fund's shares. Private credit funds at BlackRock, Blue Owl, Morgan Stanley, and Apollo also capped withdrawals during the same period.
Cliffwater, one of the largest managers offering retail-accessible private credit vehicles in the U.S., 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 who submitted withdrawal requests received back less than 30 cents for every dollar they sought to redeem.
Bill Katz, a TD Cowen analyst, said the Cliffwater update could push a sector recovery past Labor Day, telling Reuters that a slowdown could linger until year-end unless the next few updates show improvements in redemptions.
Senior asset management executives who gathered at the Bernstein Strategic Decisions Conference in New York last week also shared expectations that redemption requests in private credit would remain elevated throughout 2026.
Against that backdrop, the U.S. Department of Justice is asking questions. Jay Clayton, the United States Attorney for the Southern District of New York – and a former chairman of the U.S. Securities and Exchange Commission – told the Bloomberg Global Credit Forum on Wednesday that his office is actively examining how asset managers value private assets.
"Regarding marks and transparency of marks, we can do a better job," Clayton said, as per Reuters.
In a market where multiple participants hold the same asset marked at different levels, he said it was important to ask questions, "particularly if they're making fees." Clayton added that his team is looking specifically at whether managers are marking 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. "I'm asking my people to look at that question across the marketplace."
The scrutiny reflects longstanding unease about how illiquid private assets are valued – a process that, critics note, involves significant discretion and happens infrequently. Unlike publicly traded securities, private loans and equity stakes rarely change hands, making it difficult for outside observers, including regulators and investors, to verify the marks that managers assign.
Clayton said large financial institutions had been cooperative.
"I've never faced a situation where I asked one of them for information, said this is really important to me, and not been provided it," he told the forum, adding that the leaders of those institutions "don't want shenanigans."
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