Non-Traded BDCs Faced Record Outflows in Q2 2026

Private credit funds saw shareholder redemptions significantly outpace new capital issuance during the second quarter of 2026.

Updated on Oct. 12, 2026 in Investing

Non-Traded BDCs Faced Record Outflows in Q2 2026

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Non-traded business development companies (BDCs) experienced record net outflows in Q2 2026 as redemption requests surged. During this period, the funds issued $3.3 billion in new shares while paying out $8.1 billion to exiting shareholders.

Why it matters

The surge in withdrawal requests was driven by negative sentiment regarding SaaS exposure and a redemption halt at a major fund. This created significant liquidity pressure, forcing several funds to limit payouts and resort to asset sales to meet demand.

The 12 largest non-traded BDCs processed $7.6 billion in redemptions during Q2 2026, often utilizing 5% quarterly share-repurchase caps to manage liquidity. Blue Owl Technology Income Corp. faced a substantial 38.1% redemption demand during the same period.

The players

Blackstone Private Credit Fund

This is a large non-traded business development company that faced significant payout requirements during the second quarter of 2026.

Blue Owl Technology Income Corp.

This fund reported a high level of redemption demand at 38.1% during the second quarter of 2026.

OBDC II

This BDC halted its redemptions and shifted its strategy toward returning capital through the sale of assets.

The details

Funds relied on prorating investor requests and executing special distributions or asset sales to fulfill capital returns. High demand was particularly evident at Blackstone Private Credit Fund, which paid out $3.2 billion in redemptions as investors moved to exit their positions.

2022 marked the start of the period used for BDC cash flow tracking.
Fundraising reached a total of $13.4 billion in Q1 2025.
Redemption demand began to spike in Q1 2026.
Outflows exceeded inflows for non-traded BDCs in Q2 2026.
Redemption requests saw a slight decline by Q3 2026.

Market Dynamics

The Q2 2026 outflows represent a sharp departure from earlier fundraising growth cycles, challenging the stability of private credit structures. This event mirrors liquidity pressures seen in other alternative investment vehicles that rely on limited-liquidity windows rather than daily trading.

Investors in these funds may face extended wait times for capital returns due to the use of quarterly redemption caps. Those looking to liquidate positions are subject to the liquidity status of individual funds, which may prioritize asset sales to manage payouts.

The takeaway

Investors should note that non-traded private credit funds carry specific liquidity risks tied to their underlying asset classes. Diversifying holdings remains a key strategy for managing the potential delays in capital access inherent in these private structures.