Eurodollar University Oh Sh*t... Another $33B Private Credit Fund Is Blowing Up...
Mar 12, 2026
Tension in private credit markets after a major $33B fund faces big redemptions and forced asset sales. Discussion of how prearranged sales and collateral revaluations can spark wider liquidity strains. Comparisons to past crises while highlighting differences in the current shadow banking landscape. Warnings about underwriting quality and the limits of central bank fixes.
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Slow Motion Shadow Bank Run In Private Credit
- Private credit withdrawals are escalating into a slow-motion shadow bank run as multiple $30B+ funds face redemptions.
- Cliffwater saw 7%+ requests and is arranging preplanned asset sales similar to Blue Owl and New Mountain to raise liquidity quickly.
Bad Underwriting Is The Core Problem
- The private credit crisis is driven by bad underwriting, not just sentiment, according to PIMCO and market examples.
- Years of sloppy lending created 'toxic' loans that now force investors to reassess real losses across funds.
Prearrange Asset Sales For Quick Liquidity
- Prearrange liquidity solutions like strategic asset sales to avoid costly emergency financing when redemptions spike.
- Cliffwater and others executed preplanned sales that transfer credit risk and provide immediate cash without bank bridges.