The world’s largest alternative asset manager has capped withdrawals at its flagship private credit fund, BCRED.
Bloomberg reported that Blackstone has capped BCRED withdrawals at 5 per cent after investors sought to redeem 10 per cent of shares, the latest firm to cap withdrawals amid a continued investor exodus.
It comes after the US$79 billion private credit fund, the largest of its kind, faced elevated investor redemption requests last quarter but opted to meet them in full, bucking an industry trend in which several peers imposed withdrawal limits.
In an unusual move, the fund lifted its usual 5 per cent limit on redemptions to 7 per cent while the firm invested US$400 million to allow all requests to be met.
However, as redemptions climbed further in Q2, Blackstone’s decision to cap withdrawals now brings it in line with the broader market.
According to Bloomberg reporting, the firm has argued that redemption limits are an inherent feature of private market funds, with investors effectively trading liquidity for the potential of stronger long-term returns.
The development follows a sharp divergence in flows across the asset manager’s flagship strategies last quarter, with BCRED recording significant outflows while its BREIT real estate fund attracted net inflows for the first time in three years.
In its quarterly results for the three months to 31 March, Blackstone’s BCRED fund saw quarterly outflows of US$3.7 billion, while its BREIT fund raised US$1.2 billion.
The fund also recorded its first monthly loss in more than three years in February, slipping 0.4 per cent, a result the firm attributed to wider spreads across public and private markets and unrealised marks on individual holdings.
Redemption requests across the private credit market are expected to accelerate this quarter, with investors stepping up efforts to withdraw capital after previously facing restrictions on access to their funds.
Pressure on private credit funds this year has been driven by concerns over exposure to software firms vulnerable to AI disruption, as well as the legacy of the low-rate era, which encouraged higher leverage.
These concerns have meant the rapidly growing asset class has come under heightened scrutiny, with investors pushing for greater transparency and stronger regulation.
Liquidity expectations have also shifted in recent years as these funds have opened up to retail investors, who could not previously access private markets in this way.
JP Morgan chief executive Jamie Dimon’s now-infamous warning of more private credit “cockroaches” ahead underscores the growing debate around the asset class, later adding in his annual letter that losses in private credit could be higher than expected when the credit cycle turns.
Dimon had first warned that further “cockroaches” could emerge for the asset class following the collapse of sub-prime auto lender Tricolor and car parts supplier First Brands in October 2025.
However, in the same letter, he still maintained that the sector “probably does not present a systemic risk”, echoing a Barclays report that also downplayed concerns about the asset class.
