Sept 3 (Reuters) – Blackstone is continuing to cap withdrawals at its flagship private credit fund in the third quarter as requests to pull money remain elevated, according to a regulatory filing on Thursday.
Investors sought to pull $4.3 billion, or 10% of shares, in the third quarter from Blackstone Private Credit Fund (BCRED), roughly matching the previous quarter’s level.
The world’s largest private credit fund will repurchase 5% of shares in the quarter, the customary threshold for such vehicles.
The latest data indicates that wealthy individuals are continuing their attempts to cash out of such vehicles after many years of piling into funds that offer exposure to rarely traded assets.
Redemptions come amid concerns over lending standards and how software companies that have borrowed heavily from direct lenders will navigate AI disruption.
Shares of Blackstone, the world’s largest alternative asset manager, were last up 0.6% in premarket trading after an initial dip.
“We believe this provides shareholder liquidity while preserving capital to deploy into new investments,” BCRED said in an investor update.
Blackstone’s BCRED had fulfilled roughly half of the $4.5 billion repurchase requests in the second quarter, leaving a backlog of $2.3 billion in unfulfilled requests.
A significant portion of those unfulfilled requests were resubmitted in the third quarter, BCRED said.
The fund logged net outflows of about 3% as fewer new buyers came into the vehicle during the quarter, pulling in nearly $750 million of inflows.
BCRED remains well capitalized, with loan repayments and inflows continuing to outpace share repurchases, the fund said.
Its Class I shares have returned a 9% annualized total return since inception, which the fund said represents a roughly 290 basis points premium to leveraged loans.
Redemption windows at major U.S. non-traded private credit funds for the third quarter began closing earlier this week. Tender offer windows across those vehicles are poised to expire throughout September.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar and Vijay Kishore)
Comments