The private credit crisis is getting worse: Investor withdrawal requests from large private credit funds has surged +$4.3 billion QoQ, or +56%, to $12 billion so far in Q2 2026. The Cliffwater Corporate Lending Fund saw the largest increase in redemption requests, rising +$3.0 billion to $5.3 billion. This was followed by the Blackstone Private Credit Fund's redemption increase of +$720 million, to $4.5 billion. This comes as new sales of business development companies (BDCs), the primary vehicle for retail private credit investing, dropped -74% YoY in April, to just $1.6 billion, the lowest monthly total since May 2023. In other words, far fewer retail investors are putting new money into private credit funds as confidence in the sector rapidly deteriorates. Outflows are expected to continue, with capital projected to leave private credit funds over the next 1 to 2 years before slowing. Stress in the private credit market is rising.(The Kobeissi Letter)