Cliffwater’s flagship private credit fund is facing another wave of investor withdrawal requests, raising fresh concerns about liquidity pressure across the private credit market.

The Cliffwater Corporate Lending Fund received redemption requests equal to 17% of its shares in the second quarter, up from about 14% in the first quarter. The fund limited repurchases to 5%, meaning investors sought to pull more than $5 billion while the fund allowed roughly $1.6 billion in withdrawals.

The numbers matter because Cliffwater’s fund is one of the largest retail focused private credit vehicles, with about $31.3 billion in assets. Private credit funds are often marketed as income producing alternatives to public markets, but many of these vehicles only offer limited quarterly liquidity.

The pressure hit more than Cliffwater. Shares of major alternative asset managers including Blackstone, KKR, Apollo, Ares, and Blue Owl fell more than 5% on June 3 as investors braced for more updates on withdrawals from non traded private credit funds.

The reaction reflects growing concern that retail friendly private credit vehicles could face a tougher liquidity test if investors keep asking for money back faster than funds are designed to return it. Unlike traditional mutual funds, interval funds and similar structures do not usually offer daily liquidity.

Cliffwater’s fund had already faced elevated redemption requests in the first quarter, when investors sought to redeem about 14% of shares. The second quarter figure shows that pressure has not eased.

The Cliffwater Corporate Lending Fund invests in direct lending exposure, including loans to midsized companies. Its structure allows quarterly repurchases, but the fund can cap withdrawals to manage liquidity and avoid forced asset sales.

That cap is the point. Private credit assets are not as easy to sell quickly as publicly traded stocks or bonds. When too many investors seek redemptions at once, funds often rely on repurchase limits to avoid dumping assets at unfavorable prices.

This does not mean the fund is collapsing. Cliffwater’s fund has continued to report positive returns, and redemption limits are part of the structure. But the episode highlights a basic mismatch in some private credit products: investors may expect liquidity, while the underlying assets remain relatively illiquid.

The bigger issue is whether the private credit boom can hold up under sustained withdrawal pressure. The market has grown rapidly as retail investors searched for higher yields, but the latest redemption wave shows that semi liquid products can still become crowded at the exit.