Private credit redemptions: lessons for investors
Private credit redemptions are requests by investors to get their money back before the underlying loans mature, and in 2026 they have outpaced new fundraising in some semi-liquid vehicles in the United States. That is not a system failure, but it is a lesson about liquidity worth understanding before investing.
This article is educational. It is not investment or financial advice.
What has happened with private credit redemptions
In the US, part of private credit reaches individual savers through non-traded BDCs: vehicles that lend to private companies and offer to buy back shares every quarter, usually up to 5% of net assets.
According to Stanger data reported by InvestmentNews on 14 May 2026, about USD 6.9 billion of redemptions were met in the first quarter of 2026, against about USD 4.9 billion of new fundraising. It was the first time quarterly outflows exceeded inflows.
| Item (non-traded BDCs, US) | First quarter of 2026 |
|---|---|
| Redemptions met | ≈ USD 6.9 billion |
| New fundraising | ≈ USD 4.9 billion |
| Net flow | ≈ −USD 2.0 billion |
Consultancy Marquette Associates adds in its 27 July 2026 note that requests now exceed the 5% of assets these vehicles are required to meet, so unmet requests are growing. Its reading is that these limits protect remaining investors and avoid forced sales of illiquid assets. It also says redemption requests may have started to peak, but expects them to stay elevated for several quarters.
Why redemption limits exist
A loan to a company or a development cannot be sold overnight without a discount. If everyone asked for their money at once, the manager would have to sell assets cheaply and those who stay would bear the cost. Limits spread illiquidity among all investors in an orderly way.
If requests in a quarter exceed the limit, they are met pro rata. The following example is illustrative and hypothetical: it does not correspond to any real vehicle.
Illustrative and hypothetical example: what happens when there is a queue
A semi-liquid vehicle with EUR 1,000 million of assets allows redemptions of up to 5% per quarter. Investors ask for 14%.
| Item | Amount or percentage |
|---|---|
| Vehicle assets | EUR 1,000 million |
| Quarterly limit (5%) | EUR 50 million |
| Requests (14%) | EUR 140 million |
| Share of each request met | 35.7% |
| An investor asking for EUR 20,000 | receives EUR 7,142.86; EUR 12,857.14 stays pending |
The investor in the example does not lose money because of the queue; what is lost is the date on which they expected to have it. That gap between return and liquidity is the heart of the lesson.
Trends: what is happening worldwide and in Spain
- World, May 2026. Redemptions exceeded fundraising in US non-traded BDCs for the first time in a quarter. Source: InvestmentNews, 14 May 2026.
- World, 27 July 2026. Requests exceed the 5% that vehicles must meet and the queue of pending redemptions is growing. Source: Marquette Associates, “Liquidity Isn’t Free”.
- Spain, 24 July 2026. The Banco de España (Spain’s central bank) summarises the ECB’s SAFE survey: access to bank financing improved in the second quarter, but loan rates rose for the second quarter in a row, and obstacles eased only for large companies, with a slight worsening for SMEs. Source: Banco de España, press release (in Spanish).
- Spain, October 2026. Bank credit conditions remain a driver of demand for alternative financing; see our review of the October 2026 bank lending survey.
What it means for an individual investor in Spain: private credit is a legitimate way to diversify, but it is not a current account. Before investing, ask when and under what limits you can exit.
Daily liquidity, semi-liquid or fixed term: the differences
| Structure | How you exit | What to watch |
|---|---|---|
| Listed | Sold on the market every day | The price can fall to a discount to asset value |
| Semi-liquid | Periodic buy-backs with a cap | Queues and pro rata if requests are high |
| Fixed-term investment | At the maturity of the transaction | The term is the deal: no early exit is guaranteed |
In Europe, Regulation (EU) 2023/606 on ELTIFs allows some open-ended vehicles to set a redemption policy, with frequency and notice periods, and its delegated regulation (EU) 2024/2759 develops the conditions; see EUR-Lex. We also looked at the private credit maturity wall and at hidden defaults in private credit.
Risks to consider
- Illiquidity. You may not get your money back when you need it.
- Loss of capital. All investments carry risk, including partial or total loss of capital. Real estate collateral mitigates risk but does not eliminate it.
- Valuation. Loans are not priced daily, and their value depends on the manager’s judgement.
- Term. A transaction can last longer than planned.
- Concentration. Putting all your wealth in a single vehicle or transaction magnifies any problem.
How Ondara Group works
Ondara Group is an alternative investment manager based in Barcelona since 2018. It does not offer daily liquidity: it invests in specific transactions, with a defined term and real assets as collateral. It analyses each transaction, diversifies and keeps direct contact with the management team. The minimum investment is EUR 25,000. It aims for target double-digit returns, never guaranteed. You can meet the team on who we are and see the group’s businesses on brands.
Frequently asked questions
What is a redemption in private credit?
It is an investor’s request to get their holding back before the underlying loans mature.
Why are redemptions limited?
Because loans are illiquid. Limits avoid forced sales that would harm the investors who stay.
Does a redemption queue mean there are losses?
Not necessarily. It can be the mechanism working as designed, although the quality of the portfolio and the valuations should be reviewed.
What should I ask before investing?
The term, frequency and limits of exit, what happens if requests are high, how the portfolio is valued and what collateral backs the loans.
Are there redemptions in closed-term investments?
Normally not: the term is part of the contract and the exit comes at the maturity of the transaction.
In summary
- In the first quarter of 2026, redemptions exceeded fundraising in US non-traded BDCs (source: Stanger).
- Redemption limits protect remaining investors, but delay the exit of those who want to sell.
- Private credit can diversify a portfolio, but it is not a daily-liquidity asset.
- Invest only capital you will not need for the whole term.
If you would like to know how we invest, register as an investor and we will explain how it works. The minimum investment is EUR 25,000.
This article is for information purposes only and does not constitute an investment recommendation or financial advice. All investments carry risks, including the possible loss of the capital invested, and past or target returns do not guarantee future returns. Analyse each opportunity with a professional before investing.
