Cliffwater LLC’s flagship private credit fund capped redemptions at 5% in the second quarter after investors looked to pull about 17% of shares, in a sign of enduring pressure on the $1.8 trillion market.

Private credit managers are increasingly turning to the once-unthinkable: Trading in and out of loans to dump troubled assets and hunt for bargains amid the industry’s first stress test after years of breakneck growth.

After years weighing how to dive deeper into private credit, JPMorgan Chase & Co.’s $4.3 trillion asset manager is committing to a strategy that will plow tens of billions of dollars into loans sourced by the firm’s commercial bankers.

Pacific Investment Management Co. bought all $400 million of bonds issued Monday by a Blue Owl Capital Inc. private credit fund, according to people with knowledge of the matter.

For years, private credit firms have focused on financing private equity buyouts or closely held companies that had limited access to capital. Now, they are zeroing in on their next frontier: Large public companies that want to diversify their funding mix.

Wineries, booze distributors and distilleries are turning to private credit for financing, especially as tariffs and a decline in drinking habits bring more risk to the alcohol industry.

Blackstone Inc. has won approval from the US Securities and Exchange Commission to launch its newest private credit fund, one of the latest efforts to give individuals access to assets that are mostly backed by institutions.