Okay so having looked at the details of this, it's not what it looks like. To explain, we need to back up and discuss open versus gated versus closed end investment vehicles.

ETFs and mutual funds* are open-ended. Funds can flow in and out of them with no real restrictions on movement. So if the portfolio declines, investors can bail immediately (intermediated by creation/redemption in the case of ETFs). *mostly, there are some exceptions, but y'know, mostly

At the opposite end of the spectrum are closed-end vehicles. Closed-end funds are a good example. These have a fixed capital base, which they can adjust with buybacks or new equity issuance but are not obliged to in any way. The capital they invest can't be withdrawn.

Private credit funds (and a huge host of other vehicles, ranging from PE funds to hedge funds etc) sit in between. Investors are allowed to withdraw funds, but there are generally caps relative to the fund's size. For example, only 5% of fund assets can be withdrawn in aggregate, that kind of thing.

In the case of this BlackRock fund, they are allowing investors to withdraw 5% as doc'd in the funds. They're obliged to let that happen and they're following through. They're just not letting investors withdraw MORE than what was agreed to upfront.

Another private credit fund, run by Blackstone (different company!) recently allowed withdrawals in excess of the 5% cap...but they made up the difference by putting management's own funds and firm capital into the fund to make up for withdrawals over the 5% cap.

For vehicles that have withdrawal caps, it's ~impossible to have a "bank run" where everyone demands their money back at once. That *can* [HYPOTHETICALLY] happen to ETFs. The effect is that private credit is much less likely to face a run that forces liquidations of underlying portfolios.

This is BY DESIGN. Because private credit assets are less liquid, they need to be matched with capital that can't easily walk out the door. It doesn't mean nothing bad can happen, but it dramatically narrows the range of possible bad outcomes at a structural level.