Blackstone’s Private Credit Fund (BCRED) Hits Redemption Limit

The Blackstone Private Credit Fund (BCRED), one the largest investment vehicles with a portfolio of corporate loans with net assets of $22.4 billion and total assets of $50.1 billion, announced that about 5%, which is the preset redemption limit, of the Fund’s outstanding shares were tendered in the three months ending November 30, and it “will be honoring 100% of this quarter’s shares tendered,” according to a filing.  

That’s approximately $1 billion in withdrawal requests in three months. Blackstone said the fund has $8 billion of immediate liquidity. 

Most of BCRED’s loans are first lien and senior secured debt. About 29% of the fund is allocated to software and IT, which is a significant problem considering the Federal Reserve’s most aggressive tightening in decades has led to a downturn in the technology sector. 

“BCRED is well positioned with 100% floating rate and 94% senior secured loans and zero payment defaults,” a Blackstone spokesperson said in a statement. 

BCRED’s total returns are up 7% this year, while a tradeable Blackstone Secured Lending (BXSL) is down more than 30% year-to-date.  

The redemption limit on BCRED comes on the heels of Blackstone’s announcement last week that it has limited withdrawals from its nontraded real estate investment trust, Blackstone Real Estate Income Trust (BREIT), after large numbers of investors sought redemptions. 

Investors can redeem up to 5% of their holdings in a quarter, at which point Blackstone can limit withdrawal requests to prevent a forced sale of its real estate holdings.