PIMCO president Strack said wealth managers are withdrawing from private-credit
strategies after several large direct-lending funds imposed sudden redemption
limits, accelerating searches for alternatives. Wealth-management distributors
are unwilling and often unable to sell retail private-credit products tied to
direct lending. PIMCO estimates most business development companies (BDCs) have
about 15% of AUM in redemption queues that will take several quarters to clear,
and more than $14.5bn of investor capital is trapped in over a dozen funds. Some
BDCs have accumulated large pools of stressed loans, notably software loans
maturing in 2027–28. The software sector faces roughly $386bn of syndicated loan
maturities in 2028–29, creating refinancing pressure and a projected rise in
default rates over the next few years.
