In Private Credit, Silence Can Be Costly For Fund Managers

In times of uncertainty, sunlight is the best disinfectant. However, in 2026, private credit has seen a few too many dark clouds looming as investors grow concerned about the performance of direct lending strategies. There has been widespread media coverage on the wave of redemptions, which this blog does not need to repeat — suffice to say that as, with every asset class, the moment investor perceptions change, it can be hard to stop the herd mentality from reversing course.  

Fundamentally, there is no reason to suspect that the underlying assets in private credit semi-liquids — and their institutional equivalents — are experiencing a systemic shock. Rather, what Q1 has shown is that packaging illiquid assets in structures that allow for quarterly liquidity comes with significant challenges, not least of which is the need for greater transparency and communication to help alleviate any investor concerns.  

“We have spent a lot of time speaking with distributors debugging false information and misperceptions to stabilize the confidence of our client base,” says Luc Maruenda, head of wealth solutions at Eurazeo, a leading European private markets group. “Up to the end of [the] first quarter 2026, we've been through 18 quarterly redemption windows and the average redemption is 0.6 percent of the fund’s NAV.” 

Private credit managers with more comprehensive disclosure frameworks are likely to be best positioned to reassure their end investors.  

Jeffrey Diehl, managing partner and head of investments at Adams Street Partners, recently wrote that two material data points in public filings — non-accrual rate (NAR) and payment in kind (PIK) — may signal potential warning signs and though not exhaustive “they can be useful in assessing manager underwriting discipline and portfolio quality.” Adams Street encourages managers to disclose these metrics “clearly and visibly.”  

Secure, tech-enabled alternatives platforms can readily facilitate the dissemination of more detailed, proactive reporting to help general partners (GPs) maintain a front-foot stance and control the narrative. Indeed, in the current climate, delivering a clear consistent message on why a manager might need to impose gating cannot be underestimated.  

As Goldman Sachs and others have remarked, gating is a “feature, not a bug.”  

The quicker such messaging reaches investors, prior to the fact, the better.  

“If we see redemptions in these amounts above the gates, we will gate,” Steffen Meister, executive chair of Partners Group, told the Financial Times.  

Improved investor visibility 

Certainly, the lack of transparency makes it difficult for investors to adequately assess manager quality. If private wealth channels continue to rely on semi-liquid structures, more data-rich disclosure frameworks may be needed to give investors greater visibility into valuations, performance, liquidity and portfolio credit quality at the fund level.  

Even so, disclosure can only go so far: the underlying borrowers are private companies, so transparency will always be more limited than in public markets or other more fully disclosed asset classes. “Although too much detailed information may not always be useful,” remarks Maruenda. The risk is that it might convey some anxiety, but more importantly, “there are confidentiality issues because these are not listed companies,” he continues. “If we wanted to provide more information, we would have to issue NDAs.”  

In practice, that makes highly bespoke confidentiality arrangements difficult to scale for private wealth investors.  

“Disclosure reporting for BDCs is actually quite comprehensive, which is how we can see that leverage levels and loan-to-value ratios have declined, suggesting an improvement in overall balance sheet health,” states Declan Tiernan, co-head of Europe at Oak Hill Advisors, a credit-focused alternative investment firm.  

According to Adams Street Partners, additional metrics in disclosure frameworks could include:   

• Percentage of total assets invested in loans with loan-to-value (LTV) > 60 percent
• Percentage of total assets invested in loans with interest coverage < 1
• Percentage of total assets invested in loans with debt/EBITDA > 6x
• Cumulative realized losses
• Industry sector concentration
• Liquidity

“We believe there is an opportunity for BDC and IV managers to strengthen investor confidence and decision-making by shifting from reassurance to transparency.” - Jeffrey Diehl, Adams Street Partners

Eurazeo says it reports quarterly to distribution partners on portfolio KPIs, including how many companies are on plan, above plan or below plan and require closer monitoring. The firm also conducts stress tests to measure portfolio leverage at the reporting date and the impact on implied leverage and free cash flow if EBITDA were to decline by 10, 20 or 30 percent. 

Technology can help improve data gathering to support more detailed disclosure frameworks, while freeing up the capacity of monitoring and IR teams to engage in higher-level tasks.  

Reji Vettasseri, lead portfolio manager, private markets at DECALIA, a Swiss-based investment management firm, believes building investor confidence is not just about data. “It is also about having a clear narrative and, more importantly, about building trust.” 

“[Limited partners] LPs should be given the information to form their own judgments,” he adds, “but they can only go so far in deep independent portfolio analysis on a regular basis. They need to be able to trust their GPs. More than anything, that means they need to see their GPs regularly, giving balanced guidance about how their portfolios are developing.” 

Overcommunication can break the cycle 

Concerns over software company valuations (which buyout firms bought using private credit loans), the disruptive effects of artificial intelligence (AI) and rising geopolitical tensions have conspired to bring private credit firmly under the spotlight in 2026. Investor worries are possibly overblown.  

But one thing holds true: since the advent of semi-liquid structures, concerns can quickly feed upon themselves in the absence of good communication. 

“Worries can lead to redemptions; watching others redeem leads to more worries; and if more worries lead to a further acceleration of redemptions and a fund needs to be gated, things go to a new level. The way to break the cycle is to overcommunicate,” asserts Vettasseri. 

“If the data is automated and we have better data intelligence, to give us a better understanding in near real time, it can only help,” adds Maruenda. 

Even the biggest managers in the industry understand the need to drive better transparency.  

Speaking recently on an episode of The Real Eisman Playbook podcast, hosted by Steve Eisman, Apollo’s global head of origination, Chris Edson, explained that its insurance platform, Athene, lists every single loan it holds by name, size and maturity.  

“What we've been trying to do is put out a lot of information around where to find this stuff, how to access it, how to understand it, how to interpret it. We want to lead the industry with best-in-class transparency,” Edson said.  

Technology-enabled platforms that are purpose-built for alternative investments will continue to play a central role in facilitating this drive toward greater transparency and communication, providing a secure ecosystem to share information with minimal friction. GPs who leverage platforms such as FundCentre AI to streamline secure reporting and investor communications may be better positioned to build trust, improve transparency and reduce the risk of future redemption cycles.