The Institutional Risk Analyst

UWMC must completely focus any partial redemption efforts on cleaning up Oaktree's senior Series A-1 shares first before it can touch junior tiers of preferred capital. Shareholders widely expect UWMC to sweep its core free cash flow exclusively toward these preferred redemptions in the coming years to remove Oaktree's high-coupon burden, but the available cash flow may not even be sufficient to cover the dividend. That is, Oaktree owns UWMC.

We received a number of comments on our discussion with David Kotok last week (“David Kotok: China, the Dollar and Bretton Woods 2.0”), but one of the most interesting observations came from veteran Bahamas-based gold fund manager Henry Smyth, who we interviewed last May (“Interview: Henry Smyth on the Return of Gold as Global Reserve Asset”):

But the greater risk to borrowers and investors is the widely held illusion that the valuations for rental properties grow to the sky. Take the example of China, where two decades of home price appreciation has been reversed and home prices have now fallen steadily for the past three years. How did this happen? Because the Chinese foolishly imitated the US methodology for tracking home prices, giving their citizens a false image of the actual conditions in the housing market

Several major private credit firms capped investor withdrawals this week, as an accelerated exit wave hit the industry. Firms typically limited redemptions to their customary 5% quarterly threshold. The Ares Strategic Income Fund capped withdrawals at 5% after receiving requests to redeem 14.4% of shares. And Apollo's flagship $26 billion retail-focused fund curbed redemptions at 5% after investors attempted to cash out 16.8% of their holdings.