There's Another Way Out of the Fund

In Paid in Paper we wrote about income a fund books but never pays you in cash. This note is about getting your money out.

You asked a private credit fund for your money back and got about half. The rest is in a queue, and nobody can tell you how long it will take.

You're not the only one. Fitch tracks 15 of these funds. In the third quarter, investors in 13 of them asked for an average of 9.8% of their shares back. Most only buy back 5% a quarter, and nine of the fifteen got more requests than that.

Why you only got half

The fund lends to companies, and those loans can't be sold quickly. It keeps almost no cash. A Federal Reserve note in October found these funds held 0.2% of their money in cash at the end of 2025.

So the fund buys back a fixed amount each quarter, usually 5% of its shares. When more people ask, everyone gets the same share of their request. If requests are 9.8% and the limit is 5%, you get 5 divided by 9.8, about 51%. Ask for US$1 million and you get about US$510,000.

Some funds roll the rest into next quarter. Others make you ask again. The fund can also change the limit or stop buying back. That's in the documents you signed.

Is the value on your statement right?

Chances are it isn't. These are private loans that don't trade, so the value on your statement is the manager's own estimate. The Fed note says these valuations rely on "fund manager models and judgment rather than observable transaction prices." In the first half of 2026, buyers of fund stakes paid 87% of stated value across all fund types, according to Jefferies.

Wait or sell

Take an example. This is our illustration, not a real fund. You hold US$1 million and ask for all of it back, and money a quarter from now is worth 2% less to you than money now.

In the best case, requests stay at 9.8% and the fund pays you at its stated value. Quarter one pays US$510,000, quarter two US$250,000, quarter three US$122,000 and quarter four US$60,000. Allowing for the wait, your place in the queue is worth about US$962,000.

That assumes the marks hold, and they probably won't. Each payment is made at the value on the day it's paid, so a markdown while you wait hits every payment still to come. Redemptions and marks also tend to fall together. When more investors ask to leave, you get paid more slowly and at lower prices. In the queue, you carry the pricing risk.

Some buyers will take your stake now. Cox Capital has public offers at 12.5% below stated value for one large fund and 20% below for another. At 12.5% off you'd get US$875,000 today.

Our analysis below shows how you fare under various scenarios, in US$ thousands per US$1 million. Rows are the share of investors asking out each quarter, and columns how far the marks fall over the next year, both in %. Each cell is what your place in the queue is worth now, and underneath, how much more (+) or less (−) that is than selling today at 12.5% off.

Exits	Flat	−5	−10	−20
9.8	962 +87	940 +65	918 +43	875 level
16.8	937 +62	908 +33	879 +4	820 −55
39	865 −10	830 −45	796 −79	726 −149

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At 39% requests, selling now wins in every case. At 16.8%, it wins once the marks fall more than about 10%. At 9.8%, only a 20% fall brings the two level. Each further 5% markdown costs you about US$20,000 to US$35,000, more when the queue is slow.

You can also sell part to cover what you need and leave the rest in the queue.

What we do

We usually go to the manager and run the fund's secondaries for them. The manager keeps running the fund instead of dealing with redemptions. Investors who want out get liquidity, and those who are happy can stay. It doesn't change the manager's economics.

It also tells everyone what a fair mark is. Buyers do their own work on the loans before they bid, so the price comes from what they will pay, not the manager's model.

If a manager is reluctant to do this, ask why. It may be a red flag.

What to ask your manager

Put it in writing.

• What share of total requests did the fund pay last quarter?
• Does the unpaid part of my request roll forward, or do I have to ask again? By what date?
• Who can change the limit or stop the buyback?
• Who values the loans, and how often?
• Will you open the fund to outside buyers for investors who want to leave?

The honest floor

These numbers move with everyone else's requests. You get paid faster if others stop asking and slower if more join.

If you sell at a discount and the fund recovers, the buyer gets that, not you. Selling at a loss can have tax consequences, so ask your tax adviser first. This isn't investment, legal or tax advice. Your fund's documents decide what you can do.

If you've had a notice saying only part of your request was paid, send us the notice and your latest fund report. We'll tell you what your place in the queue is potentially worth, what you could expect a buyer to pay, and how to approach your manager.

Sources

1. Bruce Kelly, "Pace of investors selling nontraded BDCs slows but remains significant, says Fitch," InvestmentNews (13 Oct 2026). Fitch Q3 requests at 9.8% of shares (10.3% in Q2), 5% quarterly cap, nine funds above 5%, Blue Owl Technology Income at 39%. https://www.investmentnews.com/alternatives/pace-of-investors-selling-nontraded-bdcs-slows-but-remains-significant-according-to-fitch/268574
2. Logan George and Chaehee Shin, "The Rise of Semiliquid Funds for Retail Investors," FEDS Notes, Board of Governors of the Federal Reserve System (14 Oct 2026). Cash and near-cash of 0.2% at these funds. Repurchase caps. Valuation practice. https://www.federalreserve.gov/econres/notes/feds-notes/the-rise-of-semiliquid-funds-for-retail-investors-20261014.html
3. Gaël Parienté, "Asia-Pacific GP-led deals could reach $16.8bn in 2026," The Secondary Brief (18 Oct 2026). Blue Owl Credit Income requests at 16.8%. https://buttondown.com/thesecondarybrief/archive/2026-10-18/
4. Gaël Parienté, "Industry Ventures' $1.74bn caps a fundraising week," The Secondary Brief (17 Oct 2026). Cox Capital offers for HPS Corporate Lending, BCRED, Apollo Debt Solutions, Ares Strategic Income and Blue Owl Credit Income, with dates. https://buttondown.com/thesecondarybrief/archive/2026-10-17/
5. Gaël Parienté, "EMK closes €1.25bn VDK CV, 40% roll," The Secondary Brief (16 Oct 2026). Jefferies H1 2026 pricing at 91% and 87% of stated value. https://buttondown.com/thesecondarybrief/archive/2026-10-16/