Travelers Capital Corp. — March 2026

The Headlines Speak for Themselves

Private credit is dominating financial media right now—and not for the right reasons.

In the last week of March 2026 alone, Apollo Global Management capped redemptions on its $15 billion Apollo Debt Solutions BDC after withdrawal requests surged to 11.2% of shares—more than double its 5% quarterly limit. Ares Management followed within 24 hours, gating its $10.7 billion Ares Strategic Income Fund after redemption requests hit 11.6%. Blue Owl, Cliffwater, and others have imposed similar restrictions. Blackstone’s flagship BCRED vehicle posted its first monthly loss in three years and saw Q1 redemption requests reach 7.9%. Goldman Sachs is now projecting $45–70 billion in aggregate private credit outflows.

The comparisons to 2008 are everywhere. CNBC is running headlines about a “zero-loss fantasy coming to an end.” NPR is warning that private credit “could lead to big trouble on Wall Street.” CNN asks whether private credit will become “a public problem.” Morgan Stanley has warned that direct lending default rates could spike to 8%—roughly four times the historical average—with particular stress in software and AI-exposed sectors. Jamie Dimon’s “cockroach” analogy from late 2025 continues to reverberate. Moody’s has named private credit contagion as one of its six key credit risks for 2026, and Jeffrey Gundlach has called semi-liquid private credit vehicles “the ultimate sin.”

This is serious. But the critical question is: what exactly is failing?

The Problem Is Structure, Not the Asset Class

Every major stress event in private credit over the past six months shares a single common thread: a liquidity mismatch between the redemption terms offered to investors and the actual behavior of the underlying assets.

Semi-liquid retail vehicles—BDCs, interval funds, evergreen structures—were designed to offer periodic liquidity on top of inherently illiquid loans. In stable markets, this works. When sentiment shifts, it breaks. The gate mechanism was always in the prospectus. The problem is that most investors never believed they’d encounter it.

When Apollo returns 45 cents on the dollar of requested redemptions, that is not a failure of credit underwriting. It is a failure of structural design—a fund architecture that promises near-term liquidity where none inherently exists. The manager is then forced into a position of either selling assets at a discount to meet redemptions or gating investors to protect remaining holders. Neither outcome reflects the actual credit quality of the underlying portfolio.

This distinction is critical, and it is being lost in the noise. The assets are not the problem. The wrapper is.

But What Exactly Secures These Loans?

The structural mismatch is only half the story. The distinction between well-constructed and poorly-constructed private credit runs all the way down to the collateral itself—and here the contrast could not be sharper.

The BDCs and evergreen vehicles now making headlines built their portfolios predominantly on loans to software companies, PE-backed enterprises, and technology-adjacent businesses. The “security” backing these facilities is largely enterprise value—the capitalized expectation of future earnings, priced at revenue multiples that have since compressed. When times are good, enterprise value feels like collateral. When sentiment shifts, lenders discover they hold a first lien on assets they cannot touch, cannot move, and cannot sell. A first lien on a customer list or a software subscription base is not the same as a first lien on a fleet of excavators or a hangar of aircraft.

At TCC, we have never confused enterprise value with collateral. Our lending is secured by tangible, physical assets that exist independently of borrower performance. Our collateral framework is built around three categories:

• Traditional and specialty equipment. Heavy machinery, transportation assets, manufacturing equipment, aviation, marine, and rail. These assets have observable secondary market prices, active auction channels, and depreciation curves that are well understood. We know what they are worth on a Tuesday morning in a receivership—not just in a management presentation. Critically, our collateral focus is on assets that are repurposeable across multiple industries, ensuring a liquid resale market exists regardless of the borrower’s specific sector.
• Real estate. Commercial, industrial, and select residential properties, used primarily as secondary collateral enhancement. We require evidence of recent comparable sales and demonstrated revenue-generating potential before accepting real property as security.
• Liquidity as a screen, not an afterthought. We will not lend against collateral we cannot readily sell. Our underwriting requires that assets be marketable, that a known price exists evidenced by frequent transactions, and that a disposition pathway is clear before capital is deployed.

Independent valuation is a condition of every investment, not a formality. Before deploying capital, TCC obtains appraisals from third-party experts—including Ritchie Bros. Auctioneers, one of North America’s largest equipment auction platforms—on applicable collateral. Valuations are conducted on a forced liquidation basis, not going-concern or management-estimated values. This discipline is reflected in our portfolio metrics: as of September 30, 2025, our average loan-to-value ratio across the portfolio stood at approximately 73% against estimated forced liquidation value. That figure means what it says. If a borrower stops paying tomorrow, we know what we can recover and how quickly.

This is what “senior secured” should mean. Not a first lien on goodwill. Not a pledge over IP and customer contracts. A charge over assets that the market prices every day—and that can be seized, marketed, and sold if the borrower fails to perform.

How TCC Is Built Differently

The Travelers Capital Private Credit Fund is an open-ended vehicle, but one whose liquidity framework is deliberately matched to the duration and cash flow characteristics of its underlying assets. This is night and day from the structures generating headlines.

The principle is straightforward: do not promise liquidity that does not organically exist in the portfolio. Our fund does not engineer periodic liquidity windows on top of illiquid term loans and hope for the best. Instead, it relies on the natural cash flow generation embedded in well-constructed private credit portfolios:

• Amortization. Senior secured loans amortize on schedule, returning capital continuously without requiring asset sales or market transactions.
• Equipment turnover. Equipment financing involves fleets and hard assets that are dynamic by nature. Units roll off lease, are refinanced, or are disposed of in the ordinary course, generating recurring cash inflows.
• Borrower refinancing. Borrowers routinely refinance their obligations, creating prepayment events that return capital to the fund independent of any redemption schedule.
• Collateral realization. In default scenarios, asset-backed positions require collateral disposition, converting hard assets into cash. This is not a theoretical backstop—it is a regular feature of any well-managed secured lending book.

In other words, liquidity in the TCC fund is not manufactured or engineered. It is realized through the normal course of credit investing. Capital returns itself. The fund’s redemption framework reflects this reality rather than fighting against it.

Why This Matters Now

The current environment is the first real liquidity stress test for private credit at scale. It is exposing a fault line that has always existed but was masked by favorable conditions: the structural mismatch between redemption terms and asset liquidity.

The firms making headlines—Apollo, Ares, Blue Owl, Blackstone—are not failing because they made bad loans (though credit quality concerns in software and AI-exposed sectors are real and growing). They are failing because they packaged illiquid assets into semi-liquid retail wrappers that cannot withstand a change in investor sentiment. When fear arrives, the structure buckles before the credit does.

This is not a new lesson. It is the same dynamic that undermined money market funds in 2008, BREIT in 2022, and now private credit BDCs in 2026. Promising liquidity that doesn’t match the underlying assets creates fragility—every time.

None of this diminishes the fundamental merits of private credit as an asset class. Senior secured direct lending to creditworthy borrowers, collateralized by real assets, with proper covenants and amortization, remains one of the most attractive risk-adjusted return profiles available. But the vehicle matters as much as the strategy.

Two Questions That Matter

Investors reading today’s headlines would be well served to focus on two questions:

What do I own? Senior secured, asset-backed, amortizing credit—or unsecured term loans to software companies valued on revenue multiples?

How is liquidity managed? Does the fund’s redemption framework reflect the actual cash flow behavior of the underlying portfolio—or does it promise something the assets cannot deliver?

At TCC, we built our fund around these questions from day one. Patient capital matched to assets that require it. Liquidity that arises from the natural lifecycle of the credit book, not from structural engineering. An alignment between what investors are told and what the portfolio actually does.

Because in private credit, returns are not only a function of risk—they are a function of time. And structure determines whether you have the time to realize them.

Stay tuned for our Q1 report for the Travelers Capital Private Credit Fund, where we take a deeper dive into this.