I have recently observed a concerning development quietly spreading through the market. What’s happening in the U.S. private credit market echoes the 2008 subprime crisis.

Last week, BlackRock announced limits on redemptions for its $260 billion corporate lending fund. Investors had requested a 9.3% redemption, but fund management limited it to just 5%. That’s about $12 billion. BlackRock called it “liquidity management,” but the market understood the real meaning—if everything is pulled out, asset sales will drive prices down.

This is not an isolated incident. Blue Owl Capital began selling $14 billion worth of assets three weeks ago. Its stock price has now fallen below its $10 SPAC launch price. Blackstone’s private credit fund is facing a record 7.9% redemption request—legal limit is 7%.

High exposure in the software sector has become a problem for these funds. The impact of AI is rapidly devaluing companies in this sector. And when one fund starts selling assets, others are forced to do the same. This drives prices even lower, leading to more redemption demands.

PIMCO’s latest report directly warns that the private credit sector will face a “full default cycle.” The firm has long criticized this sector. They say these funds were not offering enough risk premium for investors’ liquidity needs.

The structural problem is clear—semi-liquid products promise quarterly withdrawals, but the underlying assets are long-term private loans. When pressure mounts, either the gates close or assets are sold. Both scenarios deepen the crisis.

Today, the private credit market has grown to $1.8 trillion. The 2008 subprime crisis also started from a corner considered safe. This time, the central issues of risk concentration, valuation opacity, and liquidity problems are similar. The difference is, it’s now on a much larger scale.