Gibson Capital’s research director Chad Hileman convinced the firm to pull out of a private‑credit fund that held $80 million for its clients. The Wexford, Pa., wealth manager faced a fund that only allowed quarterly redemptions and managed $33 billion overall. By fall 2023 the fund’s returns faded and credit risk rose, prompting the early exit significantly.

Two high‑profile bankruptcies and a warning from JPMorgan CEO Jamie Dimon that more “cockroaches” could emerge rattled the sector. Blue Owl halted a planned merger after investor backlash, and regulators began probing liquidity. The turmoil deepened concerns the fund might invoke limits on withdrawals.

By Q1 2024 investors tried to pull about $20 billion from private‑credit funds that lend to leveraged midsize firms, forcing many to curb redemptions. Gibson’s Cliffwater Corporate Lending Fund was caught in the wave, with Q2 requests accelerating and queues forming. The episode shows how liquidity strains can trap capital in once‑attractive credit niches. Clients now scrutinize redemption clauses before committing to illiquid credit strategies.