Recent redemption figures reveal growing concerns over the sustainability of semi-liquid private equity products amid increasing investor expectations and rising market stresses.
Private credit’s first-quarter redemption figures have become a warning sign for another corner of the alternatives boom: private equity’s push into semi-liquid wealth products.
According to Robert A. Stanger & Co, investors tried to withdraw about $13.2 billion from non-traded US business development companies in the first three months of 2026, while sponsors returned a record $6.8 billion. Even so, at least five funds were unable to satisfy all requests, leaving an estimated $6.4 billion outstanding. It was the first time on record that redemptions outpaced fundraising in the sector, reflecting a sharp turn after a period of growth.
The episode does not amount to a bank-style run. The vehicles largely behaved as they were supposed to, with cash returns governed by fund rules rather than instant access. But it has sharpened a broader concern: many affluent investors appear to treat periodic liquidity as if it were guaranteed liquidity, and that misunderstanding is now hanging over the wider private markets industry.
That matters because private equity firms are courting the same wealth-channel clients with evergreen and other semi-liquid structures. Morningstar and PitchBook said such funds held $534.6 billion of assets at the end of 2025, up more than a quarter in a year, with 98 new launches during the year, a record. Morgan Stanley has separately estimated that the US market reached $457 billion across 486 semi-liquid evergreen funds by 31 December 2025, while S&P Global Market Intelligence reported that 2025 saw a decade-high 123 new evergreen fund launches, led by private debt and private equity.
These products are still a relatively small and newer part of the market than non-traded BDCs, but they are riding the same wave of retailisation. The appeal is clear enough: lower minimums, access to asset classes once reserved for institutions, and the promise of occasional redemptions. Yet the structure also introduces a tension between investor expectations and the underlying reality of illiquid assets.
For private credit, the risk is a deterioration in loan quality. BDCs lend to privately owned businesses and can be hit hard by defaults, but for evergreen private equity funds the exposure can be more severe. If corporate stress rises sharply, equity holders are last in line in a bankruptcy, making losses potentially far more painful than in a lending vehicle.
Even so, many market participants argue that the design itself should temper panic. Private credit loans commonly run for three to five years, shorter than the life of a typical private equity investment, and they generate steady interest payments that can create a sense of recurring liquidity. By contrast, equity portfolios may go for long periods with few exits and little cash returning to investors, which can make redemption pressure less likely in normal conditions.
That distinction may prove crucial as the private markets industry continues to chase affluent clients. The problem exposed in non-traded BDCs is not just one of redemptions; it is a reminder that funds offering periodic access to capital are not the same as accounts that can be emptied at will.
- https://ca.finance.yahoo.com/news/private-credit-investors-just-read-213259600.html – Please view link – unable to able to access data
- https://www.rastanger.com/news/quarterly-redemptions-exceed-fundraising-for-the-first-time-in-non-listed-bdc-market – In Q1 2026, non-listed Business Development Companies (BDCs) experienced a significant decline in fundraising, with gross sales dropping 46% from Q4 2025 and 59% from Q1 2025. This downturn led to quarterly redemptions exceeding fundraising for the first time, indicating a shift in the non-listed BDC liquidity cycle. Despite this, BDC performance remained resilient compared to public market benchmarks, with the Stanger NL BDC Total Return Index recording a minimal negative return of -0.03% in Q1, marking its first negative quarterly return since Q2 2022.
- https://www.morganstanley.com/im/en-us/institutional-investor/insights/articles/evergreen-private-equity-funds.tile.html – As of December 31, 2025, the U.S. market saw net assets under management totaling $457 billion across 486 semi-liquid evergreen funds, with more than half of these funds launched in the past four years. These funds offer individual investors access to private equity through lower investment minimums and periodic liquidity, democratizing private equity investments. The growth reflects a broader trend of private equity firms developing new fund structures to make private markets more accessible to a wider range of investors.
- https://www.spglobal.com/market-intelligence/en/news-insights/articles/2026/3/evergreen-fund-launches-reach-decade-high-99996186 – In 2025, evergreen private market fund launches reached a decade-high, with 123 new funds introduced, according to Preqin data. Private debt and private equity were the most active sectors, accounting for 49 and 32 new fund launches, respectively. Evergreen funds offer lower investment minimums and regular liquidity opportunities, making them more accessible to retail investors compared to traditional private market funds, which often lock up capital for extended periods.
- https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/4/evergreen-funds-see-fewer-launches-as-private-equity-eyes-retail-investor-base-88604715 – The number of evergreen private market funds launched is on track to decline for the third consecutive year, even as alternative asset managers continue to target the retail market. Evergreen funds are key to unlocking this market, offering lower investment minimums and regular liquidity opportunities, attributes that make them better suited for individual investors than traditional closed-end private market funds, which can lock up capital for a decade or more.
- https://www.collercapital.com/coller-secondaries-private-equity-opportunities-fund-surpasses-1billion-aum-milestone/ – Coller Capital’s Coller Secondaries Private Equity Opportunities Fund (C-SPEF) surpassed $1 billion in assets under management as of September 2025. Launched in April 2024, the fund has seen strong momentum since inception, driven by steady subscriptions from a diverse investor base across institutional, intermediary, and private wealth channels. The fund has delivered a 17.93% annualized return for I-share investors since inception.
- https://www.msci.com/research-and-insights/blog-post/the-ascendance-and-implications-of-evergreen-funds-in-private-markets – Evergreen funds, which offer continuous investment and redemption opportunities, have rapidly grown and now approach $500 billion in assets under management. These funds have generally delivered returns consistent with broader private-market asset classes over time, even outperforming in recent returns. However, they introduce new challenges, including liquidity mismatches, realigned manager incentives, and growing regulatory scrutiny, highlighting the importance of manager selection in this fund structure.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
7
Notes:
The article references data from Q1 2026, which is recent. However, similar information has been reported by other sources, such as Wealth Management and Bloomberg Law, published in April and May 2026, respectively. This suggests the content may not be entirely original. Additionally, the article appears to be based on a press release from Robert A. Stanger & Company, which typically warrants a lower freshness score due to potential biases and limited independent verification. ([wealthmanagement.com](https://www.wealthmanagement.com/alternative-investments/private-placement-bdcs-met-three-fourths-of-redemption-requests-in-first-quarter?utm_source=openai))
Quotes check
Score:
6
Notes:
The article includes direct quotes attributed to Robert A. Stanger & Company. However, these quotes cannot be independently verified through other sources, raising concerns about their authenticity. The lack of external verification diminishes the credibility of the quotes. ([rastanger.com](https://www.rastanger.com/news/quarterly-redemptions-exceed-fundraising-for-the-first-time-in-non-listed-bdc-market?utm_source=openai))
Source reliability
Score:
5
Notes:
The primary source, Robert A. Stanger & Company, is a reputable firm in the field of non-listed alternative investments. However, the article appears to be based on their press release, which may present information in a manner favourable to their interests. This reliance on a single source without independent corroboration reduces the overall reliability of the information presented. ([rastanger.com](https://www.rastanger.com/news/quarterly-redemptions-exceed-fundraising-for-the-first-time-in-non-listed-bdc-market?utm_source=openai))
Plausibility check
Score:
7
Notes:
The claims about increased redemption requests and the challenges faced by private credit investors are plausible and align with broader industry trends. However, the article lacks specific details, such as names of funds or exact figures, which would provide more context and support the claims. The absence of these specifics raises questions about the depth and accuracy of the reporting. ([rastanger.com](https://www.rastanger.com/news/quarterly-redemptions-exceed-fundraising-for-the-first-time-in-non-listed-bdc-market?utm_source=openai))
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents information based on a press release from Robert A. Stanger & Company, with limited independent verification and a lack of specific details. This raises concerns about the originality, accuracy, and reliability of the content. Given these issues, the article does not meet the necessary standards for publication under our editorial guidelines.