Blackstone Inc. has restricted withdrawals from its Blackstone Private Credit Fund (BCRED) following an increase in redemption requests from shareholders in the second quarter.
The fund, which offers periodic share repurchases, reported a rise in the percentage of shares sought for redemption compared to the prior quarter.
Redemption Requests and Withdrawal Limits
In the second quarter, shareholders requested to redeem 10% of the fund's shares. Blackstone has limited withdrawals to 5% of the fund's net asset value, a structural feature of the fund that caps quarterly repurchases at that level. This compares to a redemption request rate of 7.9% in the first quarter.
For the first quarter, Blackstone and certain employees contributed capital to fulfill all redemption requests. For the second quarter, the company approved investor redemption requests totaling approximately 7.9% of shares, representing about $3.8 billion. To meet these requests, Blackstone expanded a previously announced tender offer to cover 7% of the fund's total shares, with the remaining 0.9% addressed by the company and its employees.
Fund Structure and Assets
"The withdrawal limits are a deliberate feature of the fund's design, trading some liquidity for potential long-term outperformance." — Blackstone
BCRED is a non-traded business development company (BDC). According to Blackstone, the repayment calendar aligns with the expected repayment cycle of its investments.
As of the latest filings, the fund's total assets, including leverage, were estimated at $82 billion. The fund's net asset value was approximately $79 billion. Analysts at Evercore noted that the 10% redemption rate was lower than some had feared, though they also observed that the slowdown in gross sales is a larger, more prolonged issue for BCRED and the industry.
Market Context
Blackstone shares rose 8% on the day of the announcement, recovering from a decline the previous day after Switzerland's Partners Group limited redemptions from a private equity fund. The fund has also experienced net outflows of about 3% as new sales have slowed.