Is this the end of deep, liquid markets? Not quite—but the model has changed.
Liquidity is no longer an abstract concept; it is being tested in real time. Private markets are illiquid; this is well understood. The issue is that liquidity is increasingly engineered at the product level, often creating expectations that may not hold under stress.
This is a subtle but important shift—from an asset characteristic to what a product promises.
Practitioners used to ask: How liquid is this asset?
Now they should ask: How is this product making it seem liquid—and when does that break?
We see it in redemption pressure across private credit. The broader ecosystem is showing signs of strain: business development companies (BDCs) are trading at persistent discounts to net asset value (NAV), withdrawals are being gated, capped, or delayed, secondary markets are clearing at discounts, and fundraising has slowed alongside weaker distributed to paid-in capital (DPI).
These are not isolated dislocations; they reflect a change in how liquidity is being designed and delivered. What once felt like a stable feature of markets is now proving to be conditional, and increasingly fragile under stress.
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