Private Credit Exodus Sparks Market Tremors as $7B Flees Major Funds
Investors yanked $7 billion from Apollo, Ares, and other private credit giants after the First Brands and Tricolor bankruptcies exposed cracks in the $2.3 trillion market. SEC filings reveal redemption surges averaging 5% of fund values—with more withdrawals expected as quarterly caps lift.
Jamie Dimon's 'cockroach theory' looms large: 'When you see one, there are probably more.' The Fed's rate-cut signals have accelerated the flight from floating-rate loans, forcing dividend cuts that further spooked retail investors concentrated in BDCs and interval funds.
Equity markets twitched in response—the S&P 500 slipped 0.06% to 6,940.01 Friday—but the real action is in crypto. Bitcoin (BTC) and ethereum (ETH) are absorbing some diverted capital, with decentralized finance tokens like AAVE and COMP quietly outperforming traditional private credit instruments.
