Which firm announced it would only honor 11% of redemption requests for its private credit fund?

• A. BlackRock
• B. Fidelity
• C. Stone Ridge
• D. Vanguard

Answer: (C)

This question centers on liquidity risk and how private credit funds handle redemption requests when cash is tight. Private credit funds invest in largely illiquid assets, so they don’t generate cash as quickly as a typical open-end fund. When investors want their money back, the manager must meet those requests with available cash or by selling assets, which can be slow or costly.

If redemptions come in that exceed the fund’s near-term liquidity, managers may implement measures to protect the remaining investors, such as gating redemptions, delaying payments, or pro-rating and honoring only a portion of requests. Saying a fund would only honor 11% of redemption requests means the manager determined there wasn’t enough liquidity to meet all requests safely, so they would redeem a small portion now and likely handle the rest later or under a different schedule. This signals a severe liquidity squeeze and underscores why private funds carry restrictions on withdrawals: to prevent a fire sale of assets and to safeguard investors who stay in the fund.

The other firms are well-known for broad, highly liquid product lines, but this specific move—honoring only a small fraction of redemption requests for a private credit fund—illustrates how private-market liquidity constraints can force unusual, protective actions.