Private Credit's $7bn Exodus: Tracking the Search Volume Behind the Outflow

The scale of the outflow is stark. Over $7 billion was pulled from major Wall Street private credit funds in late 2025, a massive flight of capital that shook the market. This wasn't a minor correction; it was a direct reaction to two specific, high-attention events that became trending topics: the bankruptcies of First Brands and Tricolor. Both companies were heavily leveraged with loans and asset-backed debt arranged by banks, making their collapses a visceral warning sign for the entire private credit ecosystem.

The search volume spike on these exact topics is the digital fingerprint of investor panic. When a company like First Brands files for bankruptcy, it triggers a wave of online queries from worried investors. The same happened with Tricolor. This isn't just background noise; it's a real-time gauge of where market attention and fear are concentrated. The intensity of these searches directly correlates with the redemptions hitting about 5% of fund portfolios across firms like Apollo, Blackstone, and Ares.

At the same time, a broader macro catalyst was compressing private credit's core appeal. Falling rate expectations, signaled by the Fed, meant lower returns for funds holding floating-rate loans. This yield pressure, combined with some funds slashing dividends, added another layer of spook. The result was a perfect storm where specific corporate failures met a weakening economic backdrop, driving a massive search for answers and a swift exit of capital.

Search Volume & Market Attention: What People Are Googling

The outflow wasn't just a financial event; it was a trending topic. Search volume for terms like 'private credit outflow', 'BDC redemptions', and 'First Brands bankruptcy' spiked in December 2025, directly correlating with the reports of capital flight. This isn't background noise. It's the digital footprint of a sentiment shift, where specific corporate failures became the main character in a viral story about systemic risk.

The anxiety went beyond just those two bankruptcies. The broader topic of 'private credit risk' saw a sustained increase in search interest. This indicates heightened headline risk and a growing wave of investor anxiety that extended well beyond the initial shock. People weren't just googling about one company; they were searching for the bigger picture, trying to understand if their own investments were exposed.

This surge in search volume signals a critical shift in who is paying attention. Historically, private credit was an institutional domain. Now, the search data suggests a significant portion of the attention is coming from retail and individual investors. The ease of accessing information online means that news of a major outflow or a high-profile bankruptcy can quickly go viral, pulling more retail capital into the conversation and potentially amplifying the redemptions. The market's "googling" has become a real-time barometer of where the fear—and the capital—is flowing.

Where the Money Went: Capital Flows and Public Credit Play

The $7 billion outflow from private credit is a capital flight, and the search data shows where the fear is leading. The most direct path is from illiquid private vehicles to more liquid alternatives. Investors in large non-traded Business Development Companies (BDCs) saw redemption requests surge 200% in Q4 2025 to over $2.9 billion. This isn't a minor uptick; it's a flight from the very heart of the private credit ecosystem. The scale is staggering, with requests hitting 4.5% of net assets for Blackstone's largest vehicle alone. This creates a clear capital flow: money is being pulled from these closed-end, non-traded funds and seeking other options.

The next logical destination for this capital is more liquid, publicly traded credit alternatives. This is where market attention and search interest become critical indicators. While the search volume for "private credit outflow" spiked, the broader credit market is under pressure. Falling rate expectations are compressing yields, making the traditional appeal of credit less compelling. This dynamic is a classic catalyst for a shift in relative value. As the Bloomberg analysis notes, lower rates makes equity look better. When discount rates fall, equity valuations tend to expand, while the income from credit portfolios erodes. This narrowing spread differential is a powerful force for reallocating capital.

For investors seeking credit exposure but wanting liquidity, this sets up a potential opportunity in public credit stocks. The pressure on private credit yields, combined with a flight to liquidity, could benefit the publicly traded BDCs and credit-focused ETFs that serve as the liquid alternative. The search volume trend suggests this is a topic gaining attention, meaning more investors are actively looking for these vehicles. The capital isn't disappearing; it's being rerouted. The question is whether this flow will be a short-term panic move or a longer-term reallocation driven by the fundamental shift in relative value between private credit and other assets. The market's "googling" is now pointing toward this liquid credit play as the main character in the next chapter.

What's Next: Catalysts and Watchpoints

The $7 billion outflow is a warning shot, but the market's next moves hinge on a few clear catalysts. The first is confirmation. The initial estimate was a starting point. As executives noted, more reports are coming in the next few weeks, and the total will likely be higher. The SEC filings and fund reports due in the coming weeks are the key data points to watch. If total redemptions confirm a sustained outflow beyond the initial figure, it will validate the fear and likely keep search interest high. This isn't just about a number; it's about whether this is a one-time correction or the start of a longer capital flight.

The second watchpoint is where the money goes. The search data shows anxiety spiking around private credit, but the real action will be in the liquid alternatives. Watch for a sustained increase in search volume and trading volume for publicly traded BDCs and credit-focused ETFs. This would signal that capital is actively rerouting from illiquid private vehicles to their public counterparts, seeking liquidity and transparency. The 200% surge in redemption requests for non-traded BDCs last quarter is a stark signal of where the pressure is. If that flow continues into the public markets, it could create a powerful, self-reinforcing cycle of attention and capital.

The biggest risk, however, is that this credit stress spills over. The current environment is a classic tension between two forces: falling rate expectations, which make equity look better, and rising credit quality fears, which threaten all risk assets. If the bankruptcies of First Brands and Tricolor are seen as just the beginning, the headline risk could spread to broader public markets. As the $2.3 trillion private credit market faces a confidence crisis, the warning from JPMorgan's Jamie Dimon is relevant: "When you see one cockroach, there are probably more." If investors start questioning the health of leveraged loans and asset-backed debt more broadly, it could create a wave of selling that impacts not just BDCs but also other credit-related stocks. The search volume trend is currently focused on private credit, but the next viral topic could be a broader "credit contagion" scare. For now, the main character is the outflow, but the next act depends on whether the story stays contained or goes viral.