Cliffwater Caps Private Credit Fund Again After 16% Look To Exit
Cliffwater LLC’s flagship private credit fund again capped redemptions at 5% in the third quarter, after investors sought to pull about 16% of shares.
The $31 billion Cliffwater Corporate Lending Fund told shareholders Thursday that they’d get back about one-third of their requests, according to a letter seen by Bloomberg. That’s about in line with the prior quarter, when they asked to cash in 17%.
The fund said it “remains committed to acting in the best interests” of its shareholders, noting that investors requesting cash since the first quarter have received 78% of their capital. “We remain optimistic about the resiliency of private credit,” Cliffwater Chief Executive Officer Stephen Nesbitt said in the letter.
Cliffwater’s vehicle is the largest so-called interval fund in the $1.8 trillion private credit market. It has been closely watched because it helped the firm become an unlikely giant in the direct lending market, quickly raising money and splashing it across loans and other funds.
In the first quarter, investors in the Cliffwater fund got back around half of the roughly 14% they asked for, with the vehicle choosing to cap withdrawals at 7%. It then opted to lower the payout to 5%, in line with other private credit funds known as non-traded business development companies.
The biggest such BDC, the $77 billion Blackstone Private Credit Fund, disclosed Thursday that it would again cap redemptions at 5%, after its investors sought to redeem 10% of shares.
Results from the two funds indicate that while investors who have sought withdrawals repeatedly are starting to get more of their money back, the overall redemption backlog of about $15 billion may hold steady as new shareholders look to exit.
This article was provided by Bloomberg News.
