Key Takeaways
- • Substack author Nick Nemeth publicly accuses Larry Swedroe of undisclosed conflicts after Swedroe defended the $33 billion Cliffwater Corporate Lending Fund (CCLFX) against Nemeth's forensic audit.
- • Per Bloomberg, CCLFX investors requested 14% of shares for redemption in the March 2026 quarter, nearly three times the 7% repurchase cap, meaning roughly half of requested withdrawals will not be honored.
- • Nemeth reports cash fell 76% in six months, from $375 million to $92 million, against $6.3 billion in unfunded commitments, and that total borrowings rose from $6.8 billion to $9.8 billion.
- • PitchBook reported Cliffwater is selling $1 billion in first-lien assets through Evercore, a move Nemeth characterizes as liquidation rather than cash-drag management.
- • Rubric Capital, a $3 billion hedge fund, sent a private LP letter on February 18 calling CCLFX a 'canary in a coal mine,' which Reuters reported on February 26.
Summary
This piece is an opinion essay by Substack author Nick Nemeth, published on his Mispriced Assets newsletter, responding to a March 2026 defense of Cliffwater's CCLFX by retired finance author Larry Swedroe. Nemeth's central claims are that Swedroe failed to disclose personal ownership of CCLFX and CELFX, and that Swedroe's rebuttal did not engage with the underlying financial analysis. The essay is one party's critical view and its claims about the fund are Nemeth's own assessments of public filings, not independently verified findings.
Nemeth cites Bloomberg reporting that CCLFX investors requested 14% of shares back, nearly three times the redemption gate, which he describes as the largest withdrawal event in private credit history. He says Cliffwater caps repurchases at 7% and that the fund has been unable to honor full requests for several consecutive quarters. PitchBook reported the same day that Cliffwater is selling $1 billion in assets through Evercore. Nemeth also cites Boaz Weinstein of Saba Capital, who said on CNBC on March 10 that he expected 10-20% redemptions.
On liquidity, Nemeth states that cash fell from $375 million to $92 million over six months, a 76% decline, leaving roughly 1.5% coverage of $6.3 billion in unfunded commitments. He attributes the gap to organic cash burn drawn from the semi-annual report and cites a $3.2 billion credit facility draw and a $500 million Macquarie repo as funding sources. He also argues that total borrowings rose from $6.8 billion to $9.8 billion, and that Swedroe's 'combined leverage around 60%' figure omits embedded PIV-level debt.
Nemeth further questions CCLFX's valuation practices, pointing to a 'valuation backstop' arrangement described in Swedroe's essay and arguing that it is not disclosed in the fund's filings. He also cites a 2021 PCAOB inspection finding involving Level 3 fair value assumptions at Cohen & Company, the fund's auditor, though this relates to a historical inspection. Rubric Capital's February 18 letter, which Reuters reported on February 26, is cited as an earlier public warning. Nemeth's characterizations of the fund are contested by Swedroe and Cliffwater, and readers should weigh them accordingly.
Nemeth cites Bloomberg reporting that CCLFX investors requested 14% of shares back, nearly three times the redemption gate, which he describes as the largest withdrawal event in private credit history. He says Cliffwater caps repurchases at 7% and that the fund has been unable to honor full requests for several consecutive quarters. PitchBook reported the same day that Cliffwater is selling $1 billion in assets through Evercore. Nemeth also cites Boaz Weinstein of Saba Capital, who said on CNBC on March 10 that he expected 10-20% redemptions.
On liquidity, Nemeth states that cash fell from $375 million to $92 million over six months, a 76% decline, leaving roughly 1.5% coverage of $6.3 billion in unfunded commitments. He attributes the gap to organic cash burn drawn from the semi-annual report and cites a $3.2 billion credit facility draw and a $500 million Macquarie repo as funding sources. He also argues that total borrowings rose from $6.8 billion to $9.8 billion, and that Swedroe's 'combined leverage around 60%' figure omits embedded PIV-level debt.
Nemeth further questions CCLFX's valuation practices, pointing to a 'valuation backstop' arrangement described in Swedroe's essay and arguing that it is not disclosed in the fund's filings. He also cites a 2021 PCAOB inspection finding involving Level 3 fair value assumptions at Cohen & Company, the fund's auditor, though this relates to a historical inspection. Rubric Capital's February 18 letter, which Reuters reported on February 26, is cited as an earlier public warning. Nemeth's characterizations of the fund are contested by Swedroe and Cliffwater, and readers should weigh them accordingly.
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