By Isla Binnie

NEW YORK, June 2 (Reuters) - Investors in a $31.3 billion private credit fund managed by Cliffwater submitted requests to withdraw 17% of shares in the second quarter, but redemptions have been capped at 5%, according to a letter to shareholders seen by Reuters.

This marks an increase from the first quarter when investors sought to redeem 14% of shares in the Cliffwater Corporate Lending Fund. Redemptions then were capped at 7%.

A spokesperson for Cliffwater declined to comment.

The Cliffwater fund is structured as an interval fund, which is required to periodically offer to buy back some shares. Quarterly offers of up to 5% of the value of an interval fund are common.

Wealthy people have been queuing up to take their money out of private credit funds in recent months, as worries rise about asset valuations, lending standards, and how software companies that have received large amounts of private credit can handle the challenges of artificial intelligence.

The Cliffwater fund has about 4,000 assets, including direct loans to companies and stakes in funds managed by other investment firms.