Bonds issued by semi-liquid private credit funds had already been under pressure before recent investor redemptions, highlighting underlying stress in the $2tn sector, according to a report by Reuters citing analysis by hedge fund Fourier Asset Management.
The bond trading specialist says spreads on bonds from major interval funds, including those managed by Oaktree Capital, BlackRock, Blue Owl, Blackstone, and Ares Capital, had been narrowing in mid-2025 and early 2026 but began widening significantly in February. Oaktree’s Strategic Credit Fund, for example, saw spreads reach approximately 250 basis points, near their highest since April 2025, while BlackRock’s HPS Corporate Lending Fund widened to roughly 258 basis points in March.
Similarly, BlackRock’s HPS Corporate Lending Fund, rated BBB- by S&P and Baa2 by Moody’s, has seen spreads widen to approximately 258bps during March.
Semi-liquid structures, including interval funds and non-traded BDCs, typically allow investors to redeem capital during set windows. However, these vehicles may limit withdrawals during periods of stress to avoid forced asset sales and protect remaining investors from sharp valuation declines.
Market jitters have intensified in recent weeks, with some banks tightening lending conditions while several funds have moved to cap withdrawals. Concerns over valuations, transparency and the broader economic outlook have prompted investors to reduce exposure to the asset class.
But Fourier, which takes long-short positions across credit markets but holds no direct exposure to these funds, says public bond markets were already indicating pressure building in the sector.
