For the second quarter in a row, the Blackstone Private Credit Fund (BCRED) has limited redemptions, indicating ongoing pressures in the $1.8 trillion private credit market. The $77 billion fund informed shareholders on Thursday that it would only permit investors to withdraw 5% of their investments, despite requests to pull 10% of shares. This follows an identical outcome in the previous quarter for BCRED, which is the largest fund of its kind.
This decision marks a continued trend for BCRED. In the prior period, investors also sought to redeem 10% of their shares, and the fund similarly restricted withdrawals to 5%. This contrasts with an earlier quarter when BCRED allowed investors to pull all 7.9% of requested shares, even going so far as to have senior executives help finance the withdrawals with their own capital to cover the remaining amount.
Blackstone's move comes after other private market giants faced similar liquidity challenges. In the preceding quarter, Partners Group, a Swiss firm, had curbed redemption requests in one of its European private equity vehicles and warned that withdrawal spikes were spreading from private credit to private equity. Daniel Ivascyn, Pimco's chief investment officer, also warned of higher losses in the credit industry, noting that the market is in the midst of the first sustained default or loss cycle in many years. Despite these challenges, Blackstone's Chief Operating Officer and President, Jon Gray, has previously stated that redemption caps are a "feature, not a bug," of these products, designed to protect long-term investors.
