Investors in Blackstone’s flagship private credit fund asked for their money back this quarter. Half of them won’t get it.
The $79 billion Blackstone Private Credit Fund (BCRED) told shareholders on Thursday that withdrawal requests hit 10% of its outstanding shares but the fund will honor just 5%.
It is the first time BCRED has ever capped redemptions.
The cap works out to about half of what investors wanted, according to a regulatory filing.
Last quarter, the fund did something more theatrical. Requests hit what was then a record 7.9%, higher than the quarterly 5% cap at which Blackstone is technically allowed to deny requests.
However, rather than turn anyone away, Blackstone tapped its own employees to fund the difference out of their personal accounts.
This quarter, with requests even higher, employee checkbooks stayed closed.
Private credit might not have been the cause of crypto’s rough week this week, but the two certainly declined together. Bitcoin led a broad sell-off, trading near $64,000 at time of writing and down 13% over the past week.
Given that tens of millions of US residents own crypto, many fund redemption requests came from the same crypto investors suffering these simultaneous drawdowns.
The slow-motion ‘bank run’ in private credit
