Investors who were sold private credit funds by FINRA-registered broker-dealers may have sustained significant losses as redemption restrictions, declining net asset values (NAV), and liquidity problems continue to surface across several major products. Broker-dealers including LPL Financial, Ameriprise Financial, Osaic, and Cetera Financial Group have been among the distribution channels for these products. These funds were often marketed to retail investors as high-yield alternatives to traditional fixed income. The recent rise in private credit fund investment losses has highlighted risks that may not have been fully communicated to investors.
What Are Private Credit Funds and What Do They Hold?
Private credit funds — also known as non-traded Business Development Companies (BDCs) or interval funds — primarily hold directly originated loans made to private, often private equity-backed, companies. Common holdings include senior secured loans, unitranche debt, second lien loans, mezzanine financing, and asset-backed lending. Major funds in this space include Apollo Debt Solutions BDC, Ares Strategic Income Fund (ASIF), Blackstone Private Credit Fund (BCRED), Blue Owl Credit Advisors, and HPS Investment Partners funds. These products typically target annual yields between 8% and 12%. andThey were aggressively distributed to retail investors beginning around 2021.
Redemption Gates and NAV Concerns Are Emerging
These funds are semi-illiquid by design, meaning investors cannot freely sell their shares. Most funds impose quarterly redemption caps — typically 5% of shares outstanding — and when withdrawal requests exceed that cap, investors receive only a fraction of what they requested. Apollo Debt Solutions BDC recently informed investors it would fulfill only approximately 45% of redemption requests in the first quarter of 2026. This came after demand far exceeded its 5% quarterly cap. When redemptions are restricted, NAV can also come under pressure as forced asset sales or investor uncertainty weighs on valuations.
Did Your Broker Recommend A Private Credit Fund?
Investors who were placed into Apollo, Ares, Blackstone, Blue Owl, or HPS private credit funds through a broker at LPL Financial, Ameriprise Financial, Osaic, Cetera, or another FINRA-registered broker-dealer may have claims for unsuitability, failure to disclose liquidity risks, misrepresentation, or violations of Regulation Best Interest. Contact Soreide Law Group at (888) 760-6552 or online to speak with a securities lawyer about a possible recovery of your investment losses. Our attorneys represent investors on a contingency fee basis and advance all costs.
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