Blackstone's $77 billion Private Credit Fund (BCRED) has capped redemptions for the second consecutive quarter, allowing investors to withdraw only half of the 10% they requested. This mirrors the previous quarter's outcome and highlights ongoing pressures in the $1.8 trillion private credit market. The decision by BCRED, the largest fund of its kind, was communicated in a recent filing to shareholders.
Similarly, Cliffwater LLC's $31 billion Corporate Lending Fund, the largest interval fund in private credit, capped redemptions at 5% in the third quarter. This comes after investors sought to pull approximately 16% of shares, meaning they will receive about one-third of their requested money. This outcome is consistent with the prior quarter when investors tried to withdraw 17% and also received around one-third of their requests.
Cliffwater's regular payout ceiling was lowered to 5% to align with other private credit funds. While there's a slow thaw with repeat sellers receiving a larger proportion of their requests, the overall redemption queue, estimated at $15 billion, is not shrinking significantly as new investors seek to exit. This trend suggests that liquidity will remain rationed for those holding similar funds, emphasizing the importance of timelines for withdrawals. Despite these challenges, Cliffwater's CEO, Stephen Nesbitt, expressed optimism about the resiliency of private credit.
