Private credit excessive redemptions explained. If the book value of a private credit issuer is too high, and they redeem at par, it makes sense to sell overpriced and later buy back corrected price. At first investors in these funds were spooked by the realisation that nearly a third of their loans are to software firms, which could be disrupted by artificial intelligence. Now they are spooked by how spooked everyone else seems to be, including those in charge. Funds typically allow up to 5% of shareholdings to be withdrawn each quarter. Investors get out their cash by selling shares back to the fund at book value. Those values look too high. Redemption requests at the big funds have exceeded 5%, causing fund managers either to enforce the limit (as is their right, and probably their best option) or strain to please these investors by allowing more to sell. The spiral will continue until fund managers can convince investors that the loans they hold are worth what they say they are. Some will struggle because investors have made up their minds; others, because the valuations really are wrong. How worried should you be about private credit? economist.com/leaders/2026/04/...… From The Economist