Blackstone has capped withdrawals at its flagship private credit fund as redemption requests rose in the second quarter, according to a regulatory filing on Thursday, becoming the latest asset manager to do so.
Investors in Blackstone Private Credit Fund (BCRED) sought to pull 10 per cent of outstanding shares in the second-quarter tender offer, compared to 7.9 per cent in the previous quarter. The fund will fulfill repurchase requests representing five per cent of shares outstanding.
Redemptions across non-traded private credit funds have risen in recent months as a string of negative headlines around the multi-trillion-dollar asset class unnerved wealthy investors.
While most asset managers had already capped redemptions at the usual five per cent limit during the first-quarter tender offers, Blackstone and Oaktree Capital Management had refrained from doing so, fulfilling 100 per cent of the repurchase requests.
Redemption windows at key U.S. non-traded private credit funds for the second quarter began closing last Friday, with market participants keeping a close eye on the rate of withdrawal requests.
Cliffwater was the first to report second-quarter redemptions on Tuesday. The withdrawal requests at its flagship US$31.3 billion private credit fund worsened to 17 per cent from 14 per cent in the first quarter.
Non-traded private credit funds, like BCRED, offer investors liquidity through quarterly tender offers of up to five per cent of shares.
The fund remains well capitalized, with repayments and inflows outpacing share repurchases, it said.
Capital inflows were roughly two per cent of net asset value at BCRED in the second quarter, resulting in a net outflow of roughly three per cent of NAV.
“Repurchase activity decelerated in the back half of the offer period, with onshore volumes below prior quarter levels,” the fund said in a shareholder letter.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Sriraj Kalluvila and Shinjini Ganguli)
