Private credit funds face mounting pressure as redemption requests accelerate, forcing lenders to confront bets on software companies that expanded when capital flowed freely. Artificial intelligence now casts doubt on those borrowers, tightening terms across portfolios. JPMorgan Chase measures the damage with precision, documenting strain among leveraged lenders scrambling to preserve liquidity amid shifting risk appetites.

Borrowing costs have climbed 0.83 percentage points since the beginning of 2025, pricing reflects deeper uncertainty about repayment capacity and collateral quality. Credit “cockroaches” have crept out of little-regarded corners of the market, catching large allocators unaware and exposing mismatches between marketing promises and underlying loan performance under stress.

Wall Street executives sound alarms about disclosure gaps and uneven standards. Goldman Sachs president John Waldron warns that not everybody has marketed their product as clearly as desirable, while Jamie Dimon cautions that not everyone providing credit is necessarily good at it. These admissions reveal fractures in a sector that mushroomed during years of loose money and low scrutiny.