Newsletter · · Ashutosh Agarwal

Private Credit & Alternatives - Week of June 24, 2026: The Buyer Strike Gets Louder

Private credit and alternatives newsletter for the week of June 17–24, 2026. Apollo capped redemptions in its flagship retail credit fund and BlackRock's HLend run accelerated, but the real signal is the new-money strike: direct-lending issuance fell 40% and listed BDCs won't rally into a roaring tape.

Private Credit & Alternatives

Week of June 24, 2026: The Buyer Strike Gets Louder

Two weeks ago the redemption story still looked like a handful of nervous retail investors testing the gates. This week it grew up. Apollo's flagship credit fund capped withdrawals after exit requests hit nearly 17% of shares; BlackRock's HLend run accelerated. New money, the thing the whole machine actually runs on, is the part that's gone quiet. And the public BDC tape, the only piece of this complex that prices every day, still won't rally into one of the strongest equity markets in years, even as the managers themselves sound genuinely relaxed. That gap between what operators are saying and what the price action is screaming is the whole story right now.

TL;DR

  • The narrative shifted from "investors want out" to "investors won't come in": direct lending issuance fell ~40% quarter-over-quarter, and listed BDCs are on a buyer strike even as stocks rip.
  • Apollo's president says the redemption noise doesn't match year-to-date fund performance and will resolve "over the next two or three quarters." The skeptics say the marks are the problem.
  • The action is migrating to the plumbing: credit secondaries, CLO equity at distressed prices, insurance balance sheets, and the wealth channel re-architecting how it sells the whole asset class.

What's new

Apollo gates its flagship credit fund. Apollo Debt Solutions capped redemptions at 5% of shares after requests came in for roughly 16.8%, about $700 million, with net second-quarter outflows expected near $400 million, or ~3% of NAV, as flagged on Squawk on the Street (June 23). The desk's read: this is fundamentally a software-exposure story, worry over whether loans to software borrowers stay "money good" as AI pressures their models, and "almost 17 percent of a fund's net asset value asking for redemptions… is not insignificant," though nobody thinks it dents a trillion-dollar AUM franchise.

The bigger problem is the new money. On Eurodollar University (June 18), Jeff Snider laid out the issuance collapse: U.S. direct lending fell from ~$74.6B in Q1 to ~$44.8B in the three months ended May (~40%), PE-backed issuance down ~37% to ~$28.5B, and LBO-tied lending down ~34% to ~$15.2B. He flagged BlackRock's HLend gating after requests hit ~13% of the fund (up from 9% the prior quarter), Blackstone and Cliffwater under the same pressure, and Partners Group capping an evergreen private equity fund near 10% of NAV: the stress is no longer staying in one lane. His word for it, borrowed from an insider: "constipated." Software loans in the Morningstar LSTA index were down 4.7% YTD through May versus +1.2% for the broad index; private credit defaults matched a 2023 high in a ~$300B index per Bloomberg.

CLO equity is on sale, if you can stomach it. On The CLO Investor Podcast (June 23), MetLife Investment Management's Laila Kollmorgen said CLO equity is cheap, driven by secondary selling, not fundamentals, with May alone seeing nearly $2 billion of equity trade as investors gave up on a flat 2025 vintage. She's adding junior BBBs (BBs are "too tight or not cheap enough"), prefers broadly syndicated over private-credit CLOs ("you're just drinking the Kool-Aid of that manager"), and notes the loan index is roughly flat at 97 while software trades 91–92 and application software near 89. Dispersion, not contagion, yet.

Credit secondaries hit an inflection. On InsuranceAUM.com (June 18), Blue Owl's Josh Huffberg argued credit secondaries are where private-equity secondaries were a decade ago, still under 1% of the primary market versus ~3% in PE, and a natural pressure valve for the liquidity squeeze. Blue Owl has done nearly 50 such deals since 2009; value comes from discounts to NAV, accrued cash flows priced off a reference date six-to-nine months back, and GP-led structures with negotiated controls. IG-rated wrappers with lower capital charges make it especially relevant for insurers.

The wealth channel is rebuilding the sales architecture. On Alt Goes Mainstream (June 23), Franklin Templeton's Dave Donahoo ("God's not making any more pension plans") and Summit Wealth Group CIO Chelsea Ganey walked through what's next after perpetual products: 401(k) access and model portfolios. Tellingly, Donahoo refuses the words "semi-liquid," runs 10–20% structural liquidity per perpetual vehicle, and concedes it costs "25 or 50 basis points of return" in a good year. The pitch is shifting from yield to portfolio construction and liquidity education, exactly the muscle you build when the easy-money phase is ending.

The debate

The operators and the observers are not describing the same market. Apollo's Jim Zelter, on Squawk on the Street (June 22), steel-manned the bull case cleanly: "the actual performance in 2026 does not match the concern about redemptions, because that really is an issue that will be identified over the next two or three years." Spreads are tight, the CapEx and M&A cycles are strong, and the cloud "will work its way through the system" in two or three quarters. The bear case, made most forcefully by Snider, is that smooth marks and limited gates are precisely what let this build, and that the listed BDCs, trading at discounts with fat yields and still not bid, are voting against the marks, the dividends, and the forward cycle. The silence is just as telling: no Ares, KKR, Brookfield, or Carlyle defending the model this week, no flagship BDC managers (ARCC, BXSL, OBDC) making the affirmative case, nothing from the big evergreen vehicles (BCRED, OCIC). When the only bulls who show up have insurance float behind them and everyone else stays off the mic, that absence is data.

The names in play

Apollo (APO): gating its flagship fund while the stock is down ~6.5% YTD and its president argues the franchise is mis-priced; also winding down its commercial mortgage REIT (ARI), selling ~$9B of loan commitments to Athene at 99.7% of par, a ~23% premium to ARI's share price, per The TreppWire Podcast (June 19). BlackRock (BLK) and Blackstone (BX): both with funds at their gates. Blue Owl (OWL): positioning credit secondaries as the release valve. MetLife: buying CLO equity into the dislocation.

Read-throughs

  • Insurance is the next regulatory front. On WEALTHTRACK (June 19), Jim Grant flagged that life insurers hold ~$1.8 trillion of private credit, "almost, but not quite half" their credit portfolios, with no FDIC backstop and state guaranty caps often just $250K–$500K. He says Treasury Secretary Scott Bessent recently met state insurance commissioners to size the exposure. Watch the PE-owned insurers.
  • Regional banks are quietly recycling risk. The TreppWire team walked through credit risk transfer, banks using credit-linked notes to shed a mezzanine slice and free regulatory capital (their stylized $500M multifamily pool freed ~$34M of CET1). It's how banks keep lending without selling loans, and a structural offset to the "banks are losing share" narrative.
  • Software is the transmission channel. Apollo's redemptions, the LSTA software drawdown, and the CLO dispersion all trace to the same borrowers. If AI keeps pressuring software economics, the leveraged-loan/private-credit overlap is where it surfaces first.

What changed

The market stopped pretending this was a liquidity-timing issue and started pricing it as a confidence issue. A month ago the question was whether redemptions would peak; this week it became whether new capital re-engages at all, and the listed-BDC buyer strike, persisting through a roaring tape, says the public market's answer is "not yet." The managers say give it two or three quarters. The price action says show me.