2 Private Credit Funds Topped Our Semiliquid Fund Ratings in Q1

Morningstar assigned six more Medalist Ratings to semiliquid funds in 2026’s first quarter, including our first for a nontraded business-development company and three tender-offer funds. Of the six, two funds received Bronze ratings for their cheapest share class: Blackstone Private Credit—the largest nontraded business-development company in the world by assets—and Apollo Diversified Credit, an interval fund.

High Marks for Blackstone and Apollo

Of nearly 20 semiliquid funds rated by Morningstar, just four have at least one share class that received a Gold, Silver, or Bronze rating. Many of the funds are young and untested, which lowers our confidence that they can beat semiliquid and public peers. Private credit has yet to weather a major recession since becoming a vital part of financial markets after the global financial crisis. However, Blackstone Private Credit and Apollo Diversified Credit CRDFX’s teams, processes, and parent firms impressed and earned them Bronze ratings.

Blackstone Private Credit

Blackstone Private Credit stands out among nontraded business-development companies for its defensive approach. It emphasizes senior secured, floating-rate loans to larger, higher-quality borrowers and diversifies broadly across issuers. Rivals may take more risk by lending to smaller companies or investing lower in the capital structure.

Blackstone’s considerable scale and investment infrastructure support the strategy’s ability to source and underwrite deals and oversee its portfolio. An experienced manager trio and deep supporting bench give the fund an edge over more thinly resourced competitors.

Still, the fund courts the same risks as the rest of the category: leverage, high fees, and illiquid holdings. Those features make returns harder to evaluate and indicate that borrowed money, not just underwriting prowess, has driven strong performance.

Apollo Diversified Credit

Apollo Diversified Credit differentiates itself among interval funds by combining public and private leveraged credit in a single portfolio. The strategy leans toward private direct loans but maintains a large allocation to broadly syndicated loans and high-yield bonds, giving investors diversified exposure across leveraged credit markets.

Apollo’s deep credit platform and experienced leadership have shaped the portfolio since the firm took over management in 2022. A large analyst team supports its three seasoned comanagers, helping the fund earn a strong People Pillar rating.

The fund faces private credit semiliquid funds’ usual risks, including leverage, illiquid holdings, and limited redemptions. Despite Apollos’ sturdier portfolio and big sleeve of more readily-priced assets, its investors still court elevated risk and the possibility of delayed withdrawals in stressed markets.

Lord Abbett Credit Opportunities

Lord Abbett Credit Opportunities LCRDX received a Neutral rating for all share classes, but its portfolio management team stood out. This interval fund pursues a focused multisector bond strategy rather than a private-credit-heavy approach. Its opportunity set spans distressed debt, special situations, securitized assets, and emerging-market bonds.

Lord Abbett’s experienced team and deep fixed-income platform support its opportunistic, research-driven process. Seasoned comanagers, collaborative decision-making, and strong analysts help the fund execute its catalyst-driven, security-specific approach.

The fund doesn’t apply fund-level leverage or incentive fees, and benefits from the greater valuation transparency that comes with mostly public holdings. That has helped produce solid long-term results with somewhat lower correlation to the broad bond market, though the strategy’s performance more closely resembles high-yield bonds.

Private Equity Remains a Tough Sell in Semiliquid Funds

Semiliquid funds are built to handle illiquid investments, but even quarterly redemptions of 5% of net assets can be a challenge. Private credit semiliquid funds can use cash from their holdings’ income, prepayments, and maturing loans to meet redemptions. Meanwhile, private equity kicks off little cash, so private equity strategies must keep more cash or cashlike investments on hand. That can drag on returns and make it harder to deliver the performance investors expect for the much higher fees they pay.

Though each of the private equity funds we rated in 2026 had compelling traits, none earned one of our higher ratings.

JPMorgan Private Markets

JPMorgan Private Markets offers a sensible, broadly diversified private equity approach backed by an experienced team with a long history of managing private equity. Strong manager investment in the fund aligns them with client interests, which is a good sign.

Its thoughtful, but not especially differentiated, process relies in part on secondaries, or stakes in other private equity funds, to build the portfolio and support early returns. Private equity funds often boost their early returns by buying discounted shares of other private equity funds and then pricing them at full value once they are in their portfolios. That means long-term success depends less on access to investment deals and more on choosing the right ones—something that remains difficult to judge this early in the fund’s life.

The fund’s structure is prudent. Its liquidity sleeve and tender-offer format, which allows investors to redeem their interests at set prices and times, is better suited for a portfolio of illiquid assets. The fund, however, still limits investors’ ability to sell and has an imperfect fee structure. While competitively priced overall, the fund charges an incentive fee on unrealized quarterly gains—a notable drawback. It still needs to prove itself once the tailwind from marking up its secondaries holdings fades.

Neuberger Berman Private Markets Access

Neuberger Berman Private Markets Access invests primarily in two types of private equity deals: co-investments and general partner-led secondaries. The former allows limited partners to invest directly in specific deals with another private equity fund for a lower or no additional fee; the latter is when the general partner managing a fund moves assets into a new vehicle, giving investors a choice to cash out or reinvest. This fund also has a sleeve of assets that are easier to sell to meet redemptions. That mix offers private company exposure while mitigating the risks of having to sell illiquid holdings to meet withdrawal requests in stressed periods.

Neuberger Berman’s broad private markets platform supports deal sourcing, due diligence, planning the timing and size of its commitments, and managing liquidity. Clear accountability among senior leaders, backed by dedicated teams, strengthens execution in a complex asset class.

Semiliquid private equity funds’ common drawbacks—opaque valuations and limited redemption opportunities—temper the fund’s strengths. Cash drag and a slowdown for IPOs, mergers, and acquisitions also held back early performance. It may be better to judge results over a longer time period and against peers with similar secondaries exposure.

BlackRock Private Investments

BlackRock Private Investment XPIFX benefits from an experienced private equity team and a sensible co-investment-led approach, supported by broader firm resources across public equity and quantitative research. That organizational depth should help with sourcing, diligence, and portfolio construction in a competitive segment of the market.

The strategy’s process appears reasonable but carries notable concentration risk, particularly in software, and its long-term edge remains unproven. Its heavy emphasis on co-investments has limited the early returns seen in more secondaries-heavy peers, making selection skill harder to assess at this stage.

Performance has lagged public equity benchmarks since inception. While some of that reflects cash drag during the portfolio buildout, the fund still needs to show it can deliver compelling results through a full private equity cycle. For now, its concentrated industry exposure and muted record support a more cautious, wait-and-see stance.