Retail investor allocations to private credit moderated in January following Blue Owl’s decision to permanently halt redemptions at one of its non-traded funds, the Financial Times reported.

New commitments to non-traded business development companies declined 40% month-on-month to $3.2bn, according to investment bank RA Stanger. The slowdown follows a period of rapid growth in retail-oriented private credit vehicles, which have channelled hundreds of billions of dollars into direct lending strategies.

The broader $1.8tn private credit market has faced increased scrutiny amid concerns about software-linked exposures and rising default expectations. UBS analysts recently estimated that defaults could increase to 15%, compared with current levels of 3% to 5%.

Sales momentum has eased across several large funds. Blackstone’s $82.5bn Bcred fund recorded $1.1bn in sales during the first two months of 2026, compared with an average of more than $1bn per month last year. The fund reported $2.1bn in redemptions in the fourth quarter.

Apollo Global Management’s $25.1bn Apollo Debt Solutions disclosed $150m in February sales, 72% below its average monthly pace in 2025. Slower sales were also reported across vehicles managed by BlackRock, Ares Management, and Blue Owl.

Industry executives indicated that funds retain substantial liquidity resources, including bank credit lines and portfolios of tradable loans that can be sold to meet redemption requests. Blue Owl and New Mountain Capital both sold loan portfolios this month to reinforce liquidity.

Advisers noted that private credit remains appropriate for investors able to tolerate illiquidity, underscoring the importance of portfolio construction and risk alignment.

While retail flows have moderated, institutional demand and structural yield advantages continue to underpin the asset class. The episode highlights the evolution of semi-liquid private credit vehicles as managers refine liquidity management practices in a higher-rate and more selective fundraising environment.

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