The real danger of private credit isn’t just that investors are starting to request redemptions, but that the net asset values, interest income, and default rates many funds are showing on paper might not fully reflect the actual pressure. In plain terms, some borrowers aren’t problem-free—it’s just that the problems are being delayed. For example, some interest payments aren’t being paid but are instead being recorded as receivables. Some loan maturities are being extended. Some financial metrics are being adjusted to make reports look less alarming. And in some cases, backers are stepping in to temporarily cover the gaps to prevent issues from blowing up immediately. So on the surface, many funds still seem stable—NAVs haven’t dropped much, interest is still being collected, and default rates haven’t spiked. But that doesn’t mean the risks are gone. It’s more likely that the risks just haven’t fully surfaced yet. If high interest rates persist and refinancing becomes increasingly difficult, those delayed problems will start to slowly emerge. It might not be an immediate blow-up but rather a very gradual process, such as: 1. NAVs start to decline bit by bit 2. Dividends become smaller 3. Fundraising gets harder 4. Secondary market transfer prices drop lower and lower 5. By the time liquidation or restructuring happens, the recoverable amount turns out to be much less than expected And this chart below is actually a very clear signal. From the chart, you can see that the average redemption rate for perpetual non-traded BDCs rose from 1.6% in Q3 2025 to 4.5% in Q4 2025—a 2.8x increase in just one quarter. The key point isn’t that one specific fund has a particularly high redemption rate, but that the redemption pressure is rising across the entire sector. This shows that capital outflows are no longer an issue for individual products but a reality facing the entire retail private credit channel. In other words, the biggest concern for private credit right now isn’t just the risks that haven’t yet exploded on paper.