Cash Offers for Trapped Private Credit Investors Are Back, at Steeper Discounts

NEW YORK, August 24, 2026. The secondhand market has come back to private credit's trapped investors with a new offer, and the price has moved against them. Cox Capital Partners is seeking to buy up to $90 million of business development company shares and assets at double-digit discounts to net asset value, the Wall Street Journal reported Monday. The targets: five vehicles overseen by Blue Owl Capital, Ares Management, Apollo Global Management and BlackRock's HPS Investment Partners, at an average discount of about 26 percent.

The audience for that pitch has been waiting a while. Investors asked to pull $15.6 billion from private credit funds in the second quarter and got back $5.9 billion, according to fund disclosures compiled by the Journal. Most of the big semi-liquid vehicles, including funds run by Apollo, Ares, BlackRock and Morgan Stanley, capped quarterly withdrawals at 5 percent of net assets, and Cliffwater's $31 billion corporate lending fund did the same. By the end of the first quarter, more than $4.6 billion of investor capital was already stuck behind gates across more than a dozen funds. The structures are working exactly as designed. That is precisely the problem for anyone who believed the quarterly liquidity marketing.

What makes this round notable is that investors have seen it before and said no. In the spring, Saba Capital and Cox launched tender offers for stakes in Blue Owl managed vehicles at discounts running from roughly 20 to 35 percent. The response was close to silence: holders of Blue Owl Capital Corporation II tendered less than 1 percent of shares. Boaz Weinstein, who has described his strategy as buying pessimism, went on to raise a dedicated $1 billion vehicle for distressed private credit fund stakes anyway. He was betting the queue would lengthen and sentiment would sour. Both have happened.

The industry's mood has darkened since those first offers were shrugged off. Concerns about software company debt and what AI disruption does to recovery values have pushed public BDC valuations to their lowest levels since 2022, and the redemption queue has grown rather than cleared. A 26 percent haircut reads differently in month eight of a capped withdrawal program than it did in month two. Part of the steeper discount is opportunism. The rest is the first honest price discovery this corner of the market has had.

Private equity investors have watched this movie. Early LP-led secondaries in buyout funds also traded at wide double-digit discounts when the buyer universe was thin, then tightened as dedicated capital showed up. Credit secondaries volume roughly doubled to about $20 billion in 2025, and the dedicated dry powder chasing the strategy sits near $37 billion. If that pattern repeats, today's 26 percent average may look like the wide end of the range in a few years. That is the case for sitting tight, and it is a real one, particularly for senior secured portfolios that keep paying coupons while the queue moves.

The case for taking the money is simpler: it exists, and the gates do not care about your liquidity needs. Retail and wealth channel investors were sold semi-liquid structures on the promise that quarterly windows would be enough. For most of the last decade they were. The moment they were not, the exit price became whatever a secondary buyer would pay, and that number is set by the most pessimistic marginal bidder, not by the fund's own marks. Sponsors will point out, correctly, that caps protect remaining shareholders from forced asset sales. The investors standing in line may reasonably respond that a protection you cannot decline is also a lockup, whatever the brochure called it.

However this queue clears, the bill lands on the next fundraise. The semi-liquid wrapper was the growth engine of private credit's retail expansion, and its central promise is now being repriced in public, one tender offer at a time.