Blackstone Restricts Withdrawals Amidst Market Instability
Blackstone Inc., the world’s largest alternative asset manager, announced on Thursday that it is imposing restrictions on withdrawals from its flagship Blackstone Private Credit Fund. This decision came after investors sought to withdraw 10% of shares during the second quarter, marking a significant escalation in the ongoing exodus from private credit markets.
The $79 billion BCRED fund has limited redemptions to 5% of shares, a decrease from the 7.9% requested in the first quarter. During that time, the firm had fulfilled 100% of withdrawal requests by utilizing senior executives’ personal capital. This move is a response to wealthy investors’ continued retreat from private credit funds, following years of aggressive investing. Notably, this asset class experienced net outflows for the first time earlier this year.
“BCRED’s structure is a fundamental feature, with investors exchanging some liquidity at times for long-term outperformance,” Blackstone stated. The fund insists it remains well capitalized, with loan repayments and inflows outpacing share repurchases. It has also delivered a 9.3% annualized total return since its inception. Despite the withdrawal caps, Blackstone shares rose more than 5% in Thursday trading, rebounding from Wednesday’s 4% decline triggered by similar news from Switzerland’s Partners Group.
Source: CNBC