【Private Credit】Monetary Authority Said to Be Surveying Private Banks　Assessing Risk Scale of Private Credit　Private Bankers Quietly Arranging Events to Reassure Investor Sentiment

Private credit crisis reemerges, with market rumors that the Hong Kong Monetary Authority has surveyed several private banks to assess the risk scale of their private credit exposures. At the same time, many private banks are working hard to soothe client anxieties.

Bloomberg quoted sources reporting that private bankers in Hong Kong and Singapore received urgent calls from high-net-worth clients to inquire about the private credit market or to request redemptions of their private credit products.

The report states that international asset management firms such as Blue Owl, Blackstone Group, and KKR have held events in Hong Kong and Singapore, including casual cocktail parties and formal luncheons, arranging meetings between clients and private bankers to calm investor sentiment.

The report also mentions that Blackstone Group has held online meetings with some retail clients, assuring them that compared to peers, the firm’s exposure to distressed soft assets is limited and that it has sufficient cash reserves to meet redemption demands.

The Hong Kong Monetary Authority declined to comment on market rumors, while Blackstone Group refused to comment. Blue Owl responded that the company regularly communicates with distribution partners and clients worldwide as part of its routine business, and that Asia is an important growth market, with strong demand from institutional investors and private wealth investors on its global platform.

As some US and European companies supported by private credit face defaults, investor confidence continues to weaken, leading to a wave of redemptions from investment vehicles under Blackstone, Blue Owl Capital, and other international investment management firms. After clients attempted to withdraw far more than the permitted amount, Morgan Stanley and Cliffwater LLC restricted redemptions of their private credit funds totaling billions of dollars. Following Morgan Stanley’s downgrade of the value of some software-related loans in its asset portfolio, it also limited certain loans to private credit funds.