Sept 3 (Reuters) – Blackstone is continuing to cap withdrawals at its flagship private credit fund as requests to pull money remained elevated in the third quarter, according to a regulatory filing on Thursday.
Investors sought to pull about 10% of shares in the third quarter from the $77.2 billion Blackstone Private Credit Fund (BCRED), roughly matching the previous quarter’s level. It will repurchase 5% of shares, the customary threshold for such vehicles.
“We believe this provides shareholder liquidity while preserving capital to deploy into new investments,” BCRED said in an investor update.
The latest data indicates that wealthy individuals are continuing their attempts to cash out of such vehicles after many years of piling into funds that offer exposure to rarely traded assets.
The last few months have been one of the most closely watched periods for the private credit industry, shaped by a wave of negative headlines around AI disruption, software exposure and lending standards.
Some Wall Street analysts expect redemptions to stay elevated through the rest of 2026 and into early 2027.
Blackstone shares rose about 2% in early trading. The stock has slipped 11.2% through last close.
The world’s largest private credit fund logged net outflows of about 3% as fewer new buyers came into the vehicle during the quarter, pulling in nearly $750 million of inflows.
Blackstone’s other private wealth products, however, have seen stronger momentum in fundraising relative to the second quarter, according to the investor update.
BACKLOG OF UNFULFILLED REQUESTS
A chunk of the $4.3 billion in repurchase requests BCRED received in the third quarter came from investors who had also tendered in the prior quarter, echoing prior commentary from some other major funds.
BCRED had fulfilled roughly half of the $4.5 billion repurchase requests in the second quarter, leaving a backlog of $2.3 billion in unfulfilled requests, a significant portion of which were resubmitted in the latest tender offer.
The fund remains well capitalized, with loan repayments and inflows continuing to outpace share repurchases, BCRED said.
Fundamentals remain healthy and the vast majority of portfolio companies are performing in line or better than expectations, the fund said.
Its Class I shares have returned a 9% annualized total return since inception, which the fund said represents a roughly 290 basis points premium to leveraged loans.
Redemption windows at major U.S. non-traded private credit funds for the third quarter began closing earlier this week. Tender offer windows across other vehicles are poised to expire throughout September.
(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar and Vijay Kishore)
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