Key Takeaways
- • Unlisted evergreen fund net AUM doubled between 2022 and 2025 to $534.6bn, according to the primary source, making NAV marks a direct determinant of investor cash flows in private credit.
- • Redemption requests from the 12 largest non-traded BDCs averaged 12.1% in Q1 2026, well above the 5% threshold at which managers typically gate redemptions, following the software-sector sell-off known as the "SaaSpocalypse."
- • Publicly traded software loans fell roughly 15 percentage points within a month, exposing the gap created by holding private loans at par absent clear evidence of impairment.
- • Philip Roach of S&P Global identifies four areas of focus for managers: valuation quality, update frequency, timeliness, and investor disclosure.
- • Managers are moving toward dedicated valuation functions and third-party oversight, with SEC commentary and FCA review emphasizing functional independence.
Summary
The rapid growth of evergreen and semi-liquid structures in private credit has changed how asset valuations are scrutinized. According to the primary source, unlisted evergreen fund net assets under management increased by 100% between 2022 and 2025, reaching $534.6bn in 2025. Because these vehicles offer periodic liquidity, typically capped at a percentage of NAV, the net asset value marks now directly determine how much cash investors receive, rather than serving only a reporting function.
The article cites the early 2026 "SaaSpocalypse," a market sell-off in software driven by fears that recently released AI models would disrupt software business models and earnings. Private credit lenders had concentrated exposure to the sector. Redemption requests from the 12 largest non-traded business development companies averaged 12.1% in Q1 2026, above the 5% threshold at which managers typically gate redemptions. Philip Roach, head of private market valuation consulting for North America and EMEA at S&P Global, notes that publicly traded software loans fell around 15 percentage points within a month. Investors questioned whether GPs' marks for private loans reflected the same shift, and some may have redeemed in anticipation of future downward adjustments.
Roach argues that the practice of holding loans at par unless there is clear evidence of impairment has become more problematic. He stresses that a performing loan's fair value may still change if market risk and return requirements shift, and that managers must demonstrate such changes are considered. He identifies four focus areas for managers: valuation quality, frequency of updates, timeliness of delivery, and disclosure to investors. He also notes "enormous variation" in disclosure levels across private markets, which he expects will become a differentiating factor in fundraising.
The article reports that firms are establishing dedicated valuation functions or engaging independent third parties, moving away from arrangements in which investment teams set values for their own assets. The SEC has reinforced the importance of assessing investments against prevailing market risk and return requirements, and the FCA has highlighted "functional independence" in its review of private market valuations. Roach adds that AI tools can speed valuation processes, but complex illiquid assets still require human judgment and accountability.
The article cites the early 2026 "SaaSpocalypse," a market sell-off in software driven by fears that recently released AI models would disrupt software business models and earnings. Private credit lenders had concentrated exposure to the sector. Redemption requests from the 12 largest non-traded business development companies averaged 12.1% in Q1 2026, above the 5% threshold at which managers typically gate redemptions. Philip Roach, head of private market valuation consulting for North America and EMEA at S&P Global, notes that publicly traded software loans fell around 15 percentage points within a month. Investors questioned whether GPs' marks for private loans reflected the same shift, and some may have redeemed in anticipation of future downward adjustments.
Roach argues that the practice of holding loans at par unless there is clear evidence of impairment has become more problematic. He stresses that a performing loan's fair value may still change if market risk and return requirements shift, and that managers must demonstrate such changes are considered. He identifies four focus areas for managers: valuation quality, frequency of updates, timeliness of delivery, and disclosure to investors. He also notes "enormous variation" in disclosure levels across private markets, which he expects will become a differentiating factor in fundraising.
The article reports that firms are establishing dedicated valuation functions or engaging independent third parties, moving away from arrangements in which investment teams set values for their own assets. The SEC has reinforced the importance of assessing investments against prevailing market risk and return requirements, and the FCA has highlighted "functional independence" in its review of private market valuations. Roach adds that AI tools can speed valuation processes, but complex illiquid assets still require human judgment and accountability.
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