Newsletter · 2026-09-09 · Ashutosh Agarwal

Blackstone Caps Redemptions Again as BDC Fundraising Collapses 82% - The Private Credit Boom (and Cracks) - Week of September 9, 2026

The Private Credit Boom (and Cracks) for the week of September 9, 2026. Podcast synthesis on Blackstone's B-Cred gating redemptions for a second straight quarter, an 82 percent collapse in non-traded BDC fundraising and a Blue Owl loan marked to near zero, set against the one industry data source saying non-accruals actually ticked down.

The Private Credit Boom (and Cracks)

Week of September 9, 2026: Blackstone Caps Redemptions Again as BDC Fundraising Collapses 82%

Everything the podcasts said this week about private credit, direct lending, BDCs, and the giant managers behind them, in plain English.

TL;DR

• The stress headlines got louder. Blackstone's flagship retail credit fund (B-Cred) capped withdrawals at 5% for the second quarter in a row, fundraising for non-traded BDCs reportedly collapsed 82% year-over-year, and Blue Owl wrote a loan to a company called Loparex down to essentially zero. All of this came from macro commentators and financial hosts, not from the companies themselves.
• But the one actual industry-data source pushed back. John Cole Scott of CEF Advisors, who tracks the whole BDC universe, said non-accruals (loans that have stopped paying) actually ticked down last quarter to 1.64%, and BDCs delivered a ~4.24% total return in the first half of the year. His line: the feared "software problems aren't surfacing in the data" yet.
• The takeaway for a book: this is still a story about retail-facing, non-traded vehicles gating redemptions and a handful of named bad loans, not (yet) broad, confirmed deterioration across the big public managers' core books. The gap between scary headlines and the hard non-accrual data is the whole trade this week.

What's new

After two nearly silent weeks, private credit was back on the podcast circuit, though almost entirely through pundits and macro bears recirculating the same few data points, plus a book-tour press cycle. Here's what actually moved the conversation, ranked by how much it should matter to a portfolio.

1. Blackstone caps B-Cred redemptions again, and the non-traded fundraising machine reportedly stalled. On Eurodollar University, macro commentator Jeff Snider walked through the numbers: Blackstone's "flagship B-Cred Fund, the biggest one on the Wall Street block... has just limited redemptions for the second quarter in a row," holding total repurchases to 5% against roughly 10% of investors asking to get out each quarter. He added that fundraising for non-traded BDCs "has collapsed by an astonishing 82%," "approximately $2 billion in the second quarter, which was down from $11 billion a year earlier," with an estimated "$15 billion withdrawal backlog." Across all tracked private credit funds, he said, "investors attempted to withdraw a record $23 billion during the second quarter." He also flagged B-Cred's net asset value slipping "from $24.68 per share at the end of January to $23.64 at the end of July." (Eurodollar University, Sep 4)

• Plain English: A "non-traded BDC" is a fund that lends to private companies and is sold to everyday wealthy investors rather than traded on a stock exchange. You can only get your money out on a set schedule, and the manager can cap how much comes out at once, that cap is the "redemption gate." Two quarters of gating plus a collapse in new money is the classic squeeze: fewer dollars coming in, more people trying to leave.
• Why it matters: Directly hits Blackstone (BX) and the whole retail-wealth funnel that alternative managers have been counting on for growth. Treat the exact figures as a bear's reading of reported data, not company guidance.

2. Blue Owl reportedly wrote its Loparex loan down to near zero, and OBDC moved it to non-accrual. On Best Stocks Now, host Bill Gunderson relayed that Blue Owl "slashed the value of its loans to... North Carolina-based specialty materials manufacturer Loparex to near zero... You're not getting back your principal from that part of the portfolio," and that Blue Owl's publicly traded BDC, OBDC, "moved its exposure to Loparex to non-accrual status after the second quarter." He said it "raises fresh concerns over the valuation practices at the $1.8 trillion private credit sector." (Best Stocks Now, Sep 8)

• Plain English: "Non-accrual" means the fund has stopped counting interest income from that loan because it no longer expects to get paid. Writing a loan "to zero" means they've marked the position as worthless.
• Why it matters: A specific, named markdown at Blue Owl (OWL) / OBDC, the kind of single-name evidence bears point to when they argue the marks across private credit are too rosy.

3. The one real industry data-set says the credit picture is fine, for now. The counter-narrative came from the only genuine industry practitioner in the window. John Cole Scott, President of CEF Advisors, told The NAVigator that "we're really not seeing worse fundamental exposure to AI alone in any of the BDCs we're looking at," and that his BDC non-accrual index went from "1.77" after the first quarter to "1.64" this time, "lower today than 90 days ago, barely over where they were in fourth quarter of [20]19." He pegged first-half NAV total return at "4.24," which "annualize[d]... that's going to be between 6% and 7%." He confirmed the retail redemption story from the other side, "just over $7 billion in fundraising... down 70% from the previous year" and "almost $13 billion redeemed" in the first half, with "about 38% of the money asked for" actually returned, but framed it as a liquidity/gating issue, not a credit-loss issue. (The NAVigator, Sep 4)

• Why it matters: This is the week's most important data point because it cuts against the headlines. Non-accruals near a 2019 baseline and mid-single-digit NAV returns are not what a cycle-turning blowup looks like. If you own the big public BDCs, this is your steel-man.

4. Scott floated ARCC (and Prospect) as consolidators of a distressed peer. Same episode, actionable nugget: BlackRock TCP Capital, a bottom-tier BDC, "tried to relieve the pressure with a large asset sale... 95 cents on the dollar," and Scott said "the BDCs like Aries [Ares] Capital and Prospect are being floated" as potential acquirers, echoing the post-2008 pattern (Allied Capital to Ares; Patriot Capital to Prospect). (The NAVigator, Sep 4)

• Why it matters: Strong BDCs buying weak ones at a discount is how the last down-cycle played out, a potential NAV-accretive path for ARCC and a name to watch on distressed-BDC M&A.

5. William Cohan's book tour reframed the whole boom around Apollo. Journalist and author William Cohan (of Money to Burn, on Apollo and Leon Black) did back-to-back podcast hits. His frame: "if you look at Apollo's AUM, they have a trillion dollars under management, $850 billion of which is private credit, $150 billion of which is private equity... eight, ten years ago, they weren't even in the private credit market." That Apollo model, using insurance money (Athene) to fund long-dated lending, "has been copied by Blackstone, KKR, Brookfield, Aries [Ares]... Sixth Street, you name it." He tied the recent Medallia software restructuring to the theme: after a Thoma Bravo buyout soured, "they lost 5 billion of equity and now it's owned by its private credit lenders, KKR, Apollo, and Blackstone." (Investopedia Express, Sep 8; Private Capital / Family Office Investor, Sep 8)

• Why it matters: Useful market-structure context on Apollo (APO) and the insurance-funded lending model now shared by BX, KKR, and ARES. Note Cohan is a journalist selling a book, color and framing, not fresh operator data. Tellingly, he also said the worries may be "overblown" and that he'd "tend to agree" with Apollo's Marc Rowan at the moment, noting "JPMorgan Chase is making $60 billion of net income a year... I don't see any losers yet."

The debate

Is this the start of a credit cycle, or idiosyncratic noise inside a structurally growing, well-underwritten asset class? This week the two sides were unusually clean.

The bear case (mostly pundits and macro commentators): The retail plumbing is jamming. Two straight quarters of redemption gates at Blackstone's B-Cred, an 82% collapse in non-traded BDC fundraising, a record ~$23 billion of attempted withdrawals, and named write-downs like Loparex point to stress that the official marks haven't caught up to. Larry McDonald put it most colorfully on The Julia La Roche Show: comparing the share-price charts of the big managers to their fundamentals, "it smells to high heaven... There's something going on in the private credit side and in the triple C side with the loans where there's real credit deterioration," calling it a "late 2006 type dynamic" with "a lot of bad loans... under the surface that are just starting to metastasize." (The Julia La Roche Show, Sep 8)

The bull case (the one industry data source): The actual loan books are fine. Non-accruals ticked down to 1.64%, barely above 2019 and nowhere near COVID levels, and BDCs are still returning 6–7% annualized. What looks like panic is a liquidity event in retail-sold, non-traded vehicles (people wanting out faster than the funds allow), not a credit event in the underlying loans. That's a very different problem, and one the public BDCs, which don't gate, largely sidestep.

The pull-quote of the week, capturing exactly that tension, the same week the gates slammed, the data provider watching the loans said:

"We're really not seeing worse fundamental exposure to AI alone in any of the BDCs we're looking at... The non-accrual side index are lower today than 90 days ago, barely over where they were in fourth quarter of [20]19." That is John Cole Scott of CEF Advisors, on The NAVigator (Sep 4).

The honest read: the bears are describing the retail funnel (fundraising, redemptions, one-off marks); the bull is describing the credit book (non-accruals, NAV returns). Both can be true at once, and which one matters more depends entirely on whether the liquidity squeeze eventually forces bad selling that turns into real losses.

Stocks in play

Every name discussed by an operator or pundit this week. Remember: outside John Cole Scott's BDC data, almost all of this is commentator opinion, not company disclosure.

Not discussed with any operator specificity this week: BXSL, FSK, GBDC. Banks (JPM, Goldman, Citi, Wells, PNC) came up only in passing, Cohan noting JPMorgan's ~$60B net income and Goldman's record year as evidence "I don't see any losers yet."

Read-throughs

• Public BDCs (ARCC, BXSL, OBDC): The cleanest signal of the week is that the credit data (non-accruals down to 1.64%, ~6–7% annualized NAV returns) is holding up even as the retail funnel seizes. Exchange-traded BDCs don't face redemption gates, so the fundraising/gating story is more an overhang on sentiment than a mechanical problem for them. OBDC is the exception with direct Loparex exposure. Watch for ARCC as a distressed-BDC consolidator.
• Insurance / permanent-capital partners: Cohan's whole thesis is that the boom runs on insurance balance sheets (Apollo/Athene being the template). No new figures this week, but the model's centrality was reinforced across two shows, the more insurance money is duration-matched into private loans, the more any credit crack becomes an insurance-sector question too.
• Regional banks losing share: No direct podcast coverage in-window. The closest adjacent data point, Coastal Bank's $68.8M credit expense on a LendingPoint-originated consumer loan book, is bank-fintech consumer lending, not institutional private credit, and shouldn't be read as private-credit-fund evidence.
• Syndicated loans / CLOs: Only via the "triple-C" (lowest-rated junk) commentary. Snider cited CCC junk-bond spreads at "1,053 basis points, the highest since the April 2025 tariff turmoil"; McDonald said "the triple C's are like blowing out wider every day." A widening low-quality credit market is the macro backdrop the private-credit bears are leaning on.
• Data-center / ABF borrowers: No substantive in-window podcast coverage. The Meta / Blue Owl "Hyperion" data-center financing thread that ran a few weeks ago stayed quiet again.

What changed vs last week

Last week (Aug 26 to Sep 2) was completely empty, zero relevant private credit episodes in the window. This week is a clear step up: seven genuinely on-topic episodes, and for the first time in weeks a real industry-data voice (John Cole Scott) with dated non-accrual and NAV numbers.

Substantively, the story advanced from vague to specific:

• Two weeks ago (Aug 19–26) we had the first hard Q2 default numbers relayed secondhand from the WSJ. Those went silent last week. This week the stress narrative resurfaced but shifted from "defaults" to redemptions and gating, B-Cred's 5% cap (now two quarters running), the 82% non-traded fundraising collapse, and the record ~$23B of attempted withdrawals.
• New this week: a specific named markdown (Blue Owl / Loparex to zero, OBDC to non-accrual), a genuine operator data set showing non-accruals actually falling (the first real bull rebuttal in weeks), and a distressed-BDC consolidation angle (ARCC/Prospect as buyers).
• Still contradicting the bears: the hard non-accrual index (1.64%, near 2019) is the mirror image of the "late 2006, bad loans metastasizing" framing. That tension is sharper this week than it has been.

Still-missing gaps (unchanged): No public-BDC management on their own live books (BXSL/ARCC/OBDC/FSK/GBDC), no named Apollo/Ares/KKR/Blackstone credit operator, and no sell-side bank analyst. Nothing on new-loan spreads vs. syndicated loans, PIK toggles / amend-and-extend mechanics, or ABF / data-center origination volumes.

A note on the week's evidence

Be clear-eyed about who was talking. Only one of this week's voices, John Cole Scott of CEF Advisors, is an industry practitioner working with the actual BDC data. Everyone else (Snider, McDonald, Gunderson, Cohan) is a commentator, journalist, or macro strategist, and much of the "news" is the same few underlying data points (B-Cred's gate, the fundraising collapse, the Loparex write-down) recirculated across several shows plus a book-tour press cycle. That's not five independent confirmations, it's one or two events echoed. The gate and the write-down are real; the framing around them is opinion.