Blackstone stock rises after BCRED reports 10% redemptions

Blackstone shares rose more than 7% on Thursday after the firm reported that investor redemption requests for its $79 billion Blackstone Private Credit Fund reached 10% of outstanding shares in the second quarter. The firm kept BCRED’s standard 5% quarterly repurchase cap and reported that withdrawal activity slowed late in the offer period.

The figures were disclosed in an investor update that noted fundraising across Blackstone’s other private wealth products has recently increased. BCRED’s managers described the investment backdrop as favorable for corporate direct lending, saying markets have stabilized since earlier volatility and deal activity has picked up with wider spreads than in the prior quarter.

BCRED is a semi-liquid private credit fund and one of the first large vehicles to report second-quarter withdrawal activity. In the investor letter, managers reported that borrowers in BCRED’s portfolio recorded 11% growth in earnings before interest, taxes, depreciation and amortization over the past 12 months, with software companies performing above the portfolio average.

The stock rebound followed a one-day decline tied to pressure across the private markets after another asset manager limited redemptions in an evergreen private equity fund. That manager indicated it may extend restrictions to additional vehicles, and its chief executive, David Layton, wrote that liquidity features are intended to protect long-term investors and keep returns driven by the quality of underlying assets.

In the first quarter, BCRED experienced heavier redemptions: roughly 7.9% of shares, about $3.8 billion, were requested for redemption. Blackstone temporarily raised its quarterly repurchase limit and used employee capital to cover excess requests. The fund attracted around $1 billion of inflows during the period but recorded a net capital outflow after meeting withdrawals.

Some market participants have raised concerns about credit conditions. Daniel Ivascyn, chief investment officer at Pimco, warned that higher losses could be emerging across the industry and that a sustained default or loss cycle may be starting after many years without one.

Blackstone executives have defended withdrawal caps in semi-liquid products. President and chief operating officer Jon Gray previously described caps as “a feature, not a bug.” In its BCRED investor letter, managers reiterated confidence in the fund’s portfolio and in near-term opportunities in direct lending.

Investors and regulators are watching BCRED’s performance and liquidity terms as an early data point on how semi-liquid private credit funds handle elevated redemption pressure.