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Cliffwater Private Credit Fund Gates Investors For Second Straight Quarter After Redemption Requests Soar To 17%

Zero Rss
2 weeks 3 days ago
Cliffwater Private Credit Fund Gates Investors For Second Straight Quarter After Redemption Requests Soar To 17%

The market may be in full-blown face-ripping bubble mode, and software stocks are now gripped in by a category 5 gamma squeeze hurricane, but not even that is helping the ongoing debacle that is private credit.

The flagship private credit fund of Cliffwater, a fund which has was slammed by redemption requests in the past quarter as the private credit crisis came to a fore, has again gated investors by capping redemptions at 5% in the second quarter after investors looked to pull more than three times that amount, or 17% of shares, Bloomberg reported, in a sign of relentless pressure on the $1.8 trillion market.

The $31 billion Cliffwater Corporate Lending Fund informed shareholders Tuesday that they’d get about one-third of their requested money back, according to a letter seen by Bloomberg. The prior quarter, investors got back around half of the roughly 14% they asked for, with the vehicle choosing to cap withdrawals at 7%.

Shortly after Cliffwater’s decision in March, S&P Global Ratings lowered its outlook on the interval fund to negative from stable, warning that the 5% redemption threshold is “an important guardrail.”

“Our repurchase program is intentionally designed to provide shareholders with periodic liquidity that aligns with the fund’s long-term investment strategy and its underlying assets,” Cliffwater CEI Stephen Nesbitt said in the letter to investors. And by periodic liquidity he meant far less liquidity than investors hoped to recovery. 

The firm previously said that the fund, which has delivered a roughly 9.4% annualized net return since it was formed in 2019, has enough liquidity to meet 5% redemptions for more than a year without selling a position or an asset. After a second straight quarter of gating that may be tested very soon.

Cliffwater has become something of an unlikely giant in the private credit market by raising money at a rapid clip and deploying it across both direct loans and funds that do such lending themselves. Other non-traded business development companies are set to report the results of their second-quarter tender offers in the coming weeks. In the previous period, some like Blackstone’s BCRED went to extraordinary lengths to let investors cash out (all for nothing as the looming redemption flood will overrun even the giant fund), while other funds at Apollo Global, BlackRock and Blue Owl enforced their 5% caps.

Tyler Durden Tue, 06/02/2026 - 22:44
Tyler Durden

Feds Seize Over A Ton Of Cocaine At Massive US-Mexico Drug-Smuggling Tunnel

Zero Rss
2 weeks 3 days ago
Feds Seize Over A Ton Of Cocaine At Massive US-Mexico Drug-Smuggling Tunnel

Authored by Jill McLaughlin via The Epoch Times,

Authorities charged four suspects on June 1 with felony drug distribution violations after finding a hidden tunnel used by drug runners inside a retail store in San Diego County that led into Tijuana, Mexico.

Investigators also seized more than a ton of cocaine worth about $45 million in connection with the subterranean tunnel, according to the U.S. Attorney’s Office and the U.S. Homeland Security’s Tunnel Task Force in charge of the operation.

“For these defendants, it wasn’t a light at the end of the tunnel. It was lights and sirens,” said U.S. Attorney Adam Gordon.

Federal agents with the tunnel task force started surveilling a Buy 4 Less warehouse on the 2400 block of Roll Drive in San Diego in late December 2025 after they became alerted to suspicious activity at the location, according to prosecutors.

A group of seven or eight “employees” at the Buy 4 Less showed up regularly at the store, but very few customers were seen coming in and out of the location, investigators said.

The supposed employees were seen taking multiple suitcases out of the store and into vehicles or walking the suitcases, which appeared to be empty, across the border into Mexico, according to the court complaint.

Investigators say that on May 29, a man loaded three large, heavy items into a white van that left the warehouse and parked on a street near a mechanic shop. Another man on a bicycle was seen looking around and into parked cars, allegedly conducting counter-surveillance for the van, investigators said.

Federal agents watched as people removed three deep freezers from the first van and placed them into the bed of another truck, then load the deep freezers with packages, according to court documents.

After the vans were loaded onto a truck, the truck left and parked a short distance away. Another man took the truck keys and drove away.

San Diego County Sheriff’s deputies with a K9 police dog stopped the truck and were alerted to the presence of a controlled substance by the canine officer.

After the traffic stop, the agents watching the warehouse saw two other men take heavy boxes out of the Buy 4 Less and load them onto a second truck, which was then driven away. Another sheriff’s deputy with a police canine stopped the second truck.

The traffic stops led federal agents to discover 851 packages of cocaine with a combined weight of more than 1 ton inside the two trucks and van.

The subterranean passageway, stretching from Tijuana, Mexico, to the purported retail store near the Otay Mesa Port of Entry known as “Buy 4 Less,” shown in this photo, is estimated to be about 1,933 feet long, 55 feet deep, and 4.5 feet in height, with a ventilation system and electricity. U.S. Department of Justice

The drug seizures also allowed federal investigators to obtain a signed judicial warrant to search the Buy 4 Less, where they found the exit point of the subterranean tunnel hidden beneath the floor of a storage room inside the store, according to the U.S. Attorney’s Office in San Diego.

The tunnel is about 55 feet deep and extends about 1,064 feet from the Buy 4 Less to the U.S.–Mexico border. Agents estimate it continues another 800 feet to another entry point in Mexico.

The tunnel was accessed using a sophisticated hydraulic lift and was equipped with ventilation and electricity, and was up to 4.5 feet tall in some areas, according to investigators.

Trucks coming from Mexico enter the United States at an inspection station after crossing the border in Otay Mesa, Calif., on April 1, 2025. Sandy Huffaker/AFP via Getty Images

The drug bust and tunnel discovery are expected to impact the cartel’s drug pipeline into California.

“This investigation and seizure represent a significant blow to the Jalisco New Generation Cartel,” said Acting Special Agent in Charge for Homeland Security Investigations in San Diego Kevin Murphy.

Charged in the case were Gregorio Epifanio Hernandez Lopez, 29, of San Diego; Brandon Escalante Sandoval, 26, of Mexico; Jose Jimenez, 32, of San Diego; and Antonio Cortez, 18, of Mexico.

Hernandez Lopez is charged with conspiracy to use a cross-border tunnel and conspiracy to import controlled substances. All defendants are charged with conspiracy to distribute controlled substances.

The U.S. Attorney’s Office in San Diego said the tunnel is one of 99 discovered in the Southern District of California since 1993 and the first since 2022.

Tyler Durden Tue, 06/02/2026 - 22:35
Tyler Durden

Whistleblower Leaks Stanford's Private Foreign-Funding Records, Exposing CCP-Linked Donors

Zero Rss
2 weeks 3 days ago
Whistleblower Leaks Stanford's Private Foreign-Funding Records, Exposing CCP-Linked Donors

Some of America's top universities have become soft targets for foreign espionage and influence operations, creating potential gateways for adversarial powers to access sensitive research, elite policy networks, and federally funded innovation pipelines.

The latest report from The Stanford Review should be viewed as yet another warning about the urgent need to protect academic institutions from foreign funding channels, obscure overseas donor networks, and national security risks within the higher education bubble.

The independent, student-run newspaper at Stanford University reports that a whistleblower has come forward with "non-public foreign funding disclosures of Stanford University" that, for the first time, reveal the names of Chinese state-backed entities and individuals funding the left-leaning university.

INVESTIGATION: A whistleblower has leaked Stanford's private foreign-funding records to the Review, revealing millions in funding from Chinese state-linked entities and CCP donors. pic.twitter.com/RWQkaxvAft

— The Stanford Review (@StanfordReview) June 1, 2026

According to the report, Stanford University accepted millions of dollars from Chinese state-linked firms, political elites, and entities tied to Beijing's political warfare and influence operations. This startling revelation is based entirely on disclosures the whistleblower provided to the student news organization.

The report continued:

Chen Yuan served as Vice Chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) from 2013 to 2018. He is the oldest son of former Vice Premier Chen Yun. Before chairing CAIFC, he served as president of the state-owned China Development Bank from 1998 to 2013, turning it into one of the world's largest policy lenders. Hoover also houses the diaries of Mao Zedong’s former secretary, Li Rui. The diaries contain commentary on senior CCP leaders, including Chen Yun and his family.

Chen Yuan’s sister, Chen Weili (陈伟力), spent two years at Stanford as a visiting scholar earlier in her career. Chen Yuan's son, Xiaoxin Chen (陈晓欣), attended Stanford and donated $1,020,000 to the university in 2024. Members of the Chen family appear in Stanford records both as students and donors.

Stanford declined to provide additional information. Responding on behalf of External Relations and the Office of Development, a university representative said it is Stanford's longstanding practice not to disclose donor names or gift details without the donor's authorization. The representative said Stanford conducts rigorous due diligence on all gifts, with an additional layer of scrutiny for international ones.

A restricted gift of this kind works as a research contract. The funds go to a named Hoover researcher or project rather than to the university unconditionally. The disclosure appears in filings made under Section 117 of the Higher Education Act.

The money was routed through the San Francisco law firm Adler & Colvin. No other reported donation in the disclosures was structured this way. Every other donor listed a home or company address. Routing a foreign gift through a legal intermediary can make it difficult to verify the donor's true identity, as it obscures the funds' true source.

The Hoover Institution shapes U.S. geopolitical discourse and participates in national research security work, including the congressionally authorized SECURE programs. Its scholars have led research on Beijing's global influence campaigns, including the program on China's Global Sharp Power (now called "US, China, and the World"), which examines how the CCP projects political influence through academic partnerships and financial engagement abroad. The SECURE program, which oversees $67 million in taxpayer funds, has faced growing scrutiny from Washington lately. The House Select Committee on the CCP is pressing the National Science Foundation to pause the program and review the University of Washington and Texas A&M after finding that they have been collaborating with Chinese military-linked entities.

Stanford works with the Department of Defense, the Intelligence Community, and federally funded research programs. The Hoover Institution participates in national research security initiatives, including the SECURE program and the NSF-funded SECURE Analytics program. At the same time, Stanford takes millions of dollars from Chinese state-linked companies and elites connected to the United Front Work Department, the CCP body that co-opts and influences groups outside the Party. U.S. government reports tie these networks to the CCP's influence apparatus.

Millions of dollars in gifts and research contracts have flowed from Chinese companies and political entities tied to Beijing's state and military-industrial system to Stanford:

Millions from Chinese State-Linked Entities

  • BOE Technology Group provided $254,000 in contracts in 2019 for research on high-conductivity stretchable electrode arrays. BOE is a Chinese state-subsidized manufacturer that the House Select Committee on the CCP says was founded in 1993 as a military and defense supplier and operates as a subcontractor for the PLA. In 2026, a federal jury found that BOE had infringed U.S. patents.

  • Huawei Technologies provided $250,000 in contracts and gifts from 2019 to 2020, after the U.S. Bureau of Industry and Security placed it on the Entity List. The purpose was not specified.

  • State Grid Corporation of China provided $1.5 million in contracts and gifts in 2019 to fund fellowships for graduate and postdoctoral scholars from China conducting energy research.

  • The Chinese Academy of Sciences (CAS) awarded $1.1 million in contracts in 2018 to a Stanford principal investigator for the Ali CMB Polarization Telescope (AliCPT-1), the first stage of a Sino-U.S. joint project led by CAS's Institute of High Energy Physics. U.S. participants include Stanford and SLAC National Accelerator Laboratory. The federally run National Institute of Standards and Technology designed and fabricated the telescope's superconducting detector arrays, which Stanford integrated into the receiver before the components were shipped to Tibet.

  • China National Petroleum Corporation (CNPC) provided $380,000 in contracts from 2023 to 2026 for a Stanford principal investigator studying cement integrity for long-term hydrogen storage.

  • China National Technical Import & Export Corporation provided $619,000 in contracts in 2022. The purpose was not specified.

  • The Ma Huateng Foundation provided $5.45 million in contracts in 2019. The purpose was not specified.

  • Jingdong Group (JD.com) provided $3.9 million in contracts and gifts from 2018 to 2021. The purpose was not specified.

  • Dowson Tong (汤道生), president of Tencent's Cloud and Smart Industries Group, gave $800,000 from 2024 to 2025 to support a faculty member's research in the School of Engineering and the Hong Kong/Stanford University Charitable Trust.

  • Tencent Charity Foundation Limited awarded $441,000 in contracts and gifts in 2016 to support Professor Leskovec's work on the diffusion of information.

  • Guangdong Qitian Institute awarded $4.75 million in contracts from 2019 to 2023 to a Stanford principal investigator developing a curriculum to support the launch of QiTian School.

  • Midea Group provided $680,000 in contracts in 2024. The purpose was not specified.

  • Weichai Power provided $1 million in contracts in 2018 for executive education lectures at Stanford's Graduate School of Business.

  • The Beijing Institute of Collaborative Innovation (BICI) provided $984,000 in contracts from 2020 to 2021. The purpose was not specified. The Beijing Municipal Government established BICI.

Gifts from CCP-Connected Political Elites

  • William Ding, CEO of NetEase, gave $25.1 million from 2020 to 2021. Ding served as a Representative of the 11th Guangdong Provincial People's Congress and sits on the 13th CPPCC.

  • Diana Chen, CEO of Pioneer Group Holdings, gave $6.2 million in 2023. Chen has served on the Beijing Committee of the 11th, 12th, and 13th CPPCC and is an Executive Member of the China Overseas Friendship Association (COFA), which is subordinate to the United Front Work Department of the CCP.

  • C. C. Tung and Harriet W. Tung gave $3 million from 2020 to 2024. C. C. Tung (Tung Chee-chen) is the Governor of the China-United States Exchange Foundation (CUSEF), supervised by the Chinese People's Association for Friendship with Foreign Countries (CPAFFC). In July 2022, the U.S. National Counterintelligence and Security Center warned state and local leaders that the CPAFFC and the United Front Work Department may exploit sister-city agreements to advance Beijing's interests. A Jamestown Foundation analysis characterized CUSEF as a vehicle for United Front "lobbying laundering."

The Stanford Review noted:

Stanford reports foreign gifts and contracts as required by federal law, though it does not always disclose the source of the funds.

What the disclosures show is a university that studies Chinese influence operations while accepting money from the people who run them.

Without a transparency mechanism for foreign gifts and contracts, the public has no way to know which researchers are funded by whom, or to what end.

Perhaps the millions of dollars from Chinese state-linked companies and elites connected to Beijing help explain why Stanford has become a haven for the radical left:

American Communist Party spotted canvassing at Stanford. pic.twitter.com/UxzUGarK4P

— The Stanford Review (@StanfordReview) January 11, 2026

We’ve got an update from the Stanford hunger strikers, who are back and charging in with full-blown moral superiority. One leads off with, “As a Muslim, specifically, I have a responsibility to stand up against injustice,” and it only gets more sanctimonious from there.

They’re… pic.twitter.com/CjpmzXmkg7

— Stu Smith (@thestustustudio) May 15, 2025

🚨 Professor David Palumbo Liu, Stanford University, co-founder of 'Campus Anti-Fascist Network.'

"When Zionists say they don't feel safe on campus, I've come to see that as they no longer feel immune to criticism of Israel. Get used to it."

BONUS: Refuses to condemn Antifa. pic.twitter.com/PiVP5iMfOn

— NizNellie3 (@NizNellie3) June 12, 2025

Spy networks at Stanford? 

Meet @ElsaJohnson, an American undergraduate junior at Stanford University who faced transnational repression (as well as her family!) from the Chinese Communist Party including online and physical surveillance on campus.

Our universities have become soft targets for foreign… pic.twitter.com/pOc5GuJrND

— Rep. Elise Stefanik (@RepStefanik) March 26, 2026

Chinese students pose a unique threat to American universities. In August, we hosted an event on how to prevent academic espionage on campus. Listen to these Stanford students describe how the Chinese Communist Party exploits Chinese students studying abroad to collect… pic.twitter.com/Wrn2YSWdQC

— Heritage Foundation (@Heritage) November 11, 2025

Meanwhile, foreign adversaries plowed $800 million into universities in 2024 (data via think tank American for Public Trust). 

Tens of billions of dollars from overseas have flowed into universities over the decades. 

The foreign-funding money trail may help explain why many universities have become fertile ground for Marxist radicalization, anti-capitalist ideology, and increasingly hostile views toward America’s political and economic system.

From a national security perspective, the concern here is not just about money flowing into classrooms, but about whether this foreign-linked funding is radicalizing the future generation. Short answer: yes. 

Tyler Durden Tue, 06/02/2026 - 22:10
Tyler Durden

Islamic extremism’s rise in California — and what to do about it

NY Post
2 weeks 3 days ago
Much has been written about the “Islamization” of Europe and the UK. Is it now California’s turn? Two major books — “Londonistan” by Melanie Phillips, and “Submission,” a novel from France’s Michel Houellebecq — have pictured an old continent that is increasingly at the mercy of often violent Islamists. Although the Muslim population in Europe...
Joel Kotkin

"The Value Didn't Arrive": Bain Finds Cost-Savings From AI Are Falling Far Short Of Projections

Zero Rss
2 weeks 3 days ago
"The Value Didn't Arrive": Bain Finds Cost-Savings From AI Are Falling Far Short Of Projections

Now that attention within the AI revolution has one again firmly turned toward the cost-benefit equation (i..e., ROI) of tokens (see "From Singularity To Tokenomics: The AI Narrative Just Hit A Serious Snag") in particular, and the trillions behind the AI spending rollout in general, and we say once again because every few months we get some iteration of the following report from Goldman published almost two years ago today...

... we have more bad news: according to a global survey by Bain, cost savings from automation are broadly falling short of projections. Which means that those expecting big savings from their investments in artificial intelligence, which is most companies, will be disappointed. 

The missed targets “should be making executives uncomfortable,” since many of them are approving increased spending for artificial intelligence on the basis of expected savings, the consulting firm said in a report shared exclusively with Bloomberg News. The problem is there are little actual savings to speak of. 

The survey, completed in April, was based on responses from executives at 951 companies with more than $100 million in revenue, across nine sectors: retail, technology, advanced manufacturing, healthcare, consumer products, energy, financial services, telecom/media/entertainment and insurance.

It found that among companies measuring their AI cost savings, the largest share (40%) realized reductions of 10% or less. Predictably, most had been expecting to see far more meaningful improvement, especially since they spent far more than that on the new technology. 

Here’s the part that Bain found the most troubling: 44% of large companies that are funding their next wave of AI spending are basing those investments on the last round of savings - savings that haven’t yet materialized. 

“The prior wave underdelivered. The savings pool is smaller than assumed,” Bain warned. “And the investment case for the current wave was sized against projections rather than actuals.” Kinda like the bubble in AI forward earnings: based on projections - which as any intern can tell you can flip on a dime - rather than actuals. 

“Self-funding the next wave from past returns sounds like discipline. In reality, it is a circular bet with a structural leak,” the firm cautioned, and concluded that "The technology worked. The value didn’t arrive."

Whether driven by hope or FOMO or a blend of both, the AI boom is exposing divides between promise and reality. An MIT research report last year showed that 95% of corporate AI pilots fall flat and concluded that the “primary factor keeping organizations on the wrong side of the GenAI Divide is the learning gap, tools that don't learn, integrate poorly, or match workflows.” 

So Bain’s latest survey wasn’t the first evidence of AI underdelivering so far on expectations. And it’s not likely the last either.

But the Bain report isolated a different problem: “Despite a decade of investments in data modernization running well into hundreds of billions of dollars globally, the No. 1 reason AI programs underperform is that companies cannot reliably get access to their own data,” Bain said.

“Companies that don’t validate their reinvestment math against what automation actually returned, rather than what it was supposed to return, are compounding risk rather than managing it” the Bain report concluded, confirming what many have already sensed: virtually nobody has done effective ROI analysis amid a technological rollout that has already soaked up more than $1 trillion in capital, the return on which appears to be modest at best. 

Bain's prescription: Instead of waiting to structure all of their data to make it ingestible by AI, companies should start with what’s available to feed into the models, and then use AI to help sort out how to structure the rest.

Meanwhile, companies that were meeting their savings targets reported running into barriers with data structure and accessibility at even higher rates than those missing their targets, but they were less likely to report organizational challenges such as insufficient budgets or competing priorities.

Adding fuel to the fire, a comparable report from Gartner found that over 40% of agentic AI projects will be canceled by the end of 2027, due to escalating costs, unclear business value or inadequate risk controls. 

“Most agentic AI projects right now are early stage experiments or proof of concepts that are mostly driven by hype and are often misapplied,” said Anushree Verma, Senior Director Analyst, Gartner. “This can blind organizations to the real cost and complexity of deploying AI agents at scale, stalling projects from moving into production. They need to cut through the hype to make careful, strategic decisions about where and how they apply this emerging technology.”

As such, Gartner recommends agentic AI only be pursued where it delivers clear value or ROI, noting that "Integrating agents into legacy systems can be technically complex, often disrupting workflows and requiring costly modifications. In many cases, rethinking workflows with agentic AI from the ground up is the ideal path to successful implementation."

“To get real value from agentic AI, organizations must focus on enterprise productivity, rather than just individual task augmentation,” said Verma. “They can start by using AI agents when decisions are needed, automation for routine workflows and assistants for simple retrieval. It’s about driving business value through cost, quality, speed and scale.” 

The problem, it now appears, is that virtually nobody has done an actual ROI analysis. But with token costs now soaring...

... the time has finally arrived, and as enterprises pull back in horror from the "great promise" of the agentic black hole, one can easily understand why both OpenAI and Anthropic, both of which are extrapolating their burst in agentic revenue in perpetuity, are rushing to go public before the market once again does the ROI math.

Tyler Durden Tue, 06/02/2026 - 21:50
Tyler Durden

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