Cliffwater's marquee private credit vehicle kept its payout limit at 5% for the third quarter after investors put in requests to redeem around 16% of shares. In a Thursday letter viewed by Bloomberg, the fund said shareholders should expect roughly one out of every three requested dollars to come back.
That outcome tracks the prior quarter, when investors tried to cash out 17%. In the first quarter, investors asked for about 14%, the fund set a 7% limit, and roughly half of those requests were met. Since the first quarter, Cliffwater says investors who asked for cash have received 78% of their money. The letter added the fund "remains committed to acting in the best interests" of shareholders, with CEO Stephen Nesbitt writing, "We remain optimistic about the resiliency of private credit."
Cliffwater later lowered its regular payout ceiling to 5%, bringing it in line with peer private credit funds, many organized as unlisted business development companies. The largest in that cohort - the $77 billion Blackstone Private Credit Fund - said on Thursday it would maintain a 5% redemption limit after investors submitted requests equal to 10% of shares.
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Cliffwater's fund is the largest interval product in private credit, a category that helped the firm scale quickly by putting capital to work in loans and other funds. Recent results across Cliffwater and Blackstone hint at a slow thaw: repeat sellers are getting a bigger slice of what they ask for, yet the overall redemption queue of about $15 billion may not shrink much as new investors line up to exit. If you hold similar funds, expect liquidity to stay rationed and timelines to matter.
