Blackstone reported that redemption demands for its Bcred private-credit fund reached 10% in the second quarter, representing $4.4 billion of shareholder requests. That level of demand increased from about 8% in the first quarter.
Faced with that volume of requests, the firm said it will limit redemptions from the $79 billion vehicle to 5% of outstanding shares. The decision marks a change from the approach taken in March, when Blackstone elected to fulfill the entirety of redemption requests.
The company also said that redemption activity eased during the latter portion of the quarter.
Market reaction
Shares of Blackstone (NYSE:BX) rose 7% on Thursday, although the stock remains down 20% year to date. Peer firms saw gains as well: Blue Owl and Ares Management each climbed by more than 4.5% on the same trading day.
Announcements about redemption activity at large private-credit and private-equity vehicles have influenced equity prices across the asset management sector. Earlier in the week, stocks fell after Partners Group disclosed withdrawal requests for roughly 10% of one of its private-equity funds. Similarly, Cliffwater revealed that investors sought to redeem 17% of shares in its $31 billion fund during the second quarter.
Industrywide, first-quarter redemption requests rose sharply, prompting a range of managers to put limits in place. Firms including BlackRock, Blue Owl, and Ares Management imposed withdrawal constraints following elevated requests that in some cases ranged from around 10% up to the 22% level Blue Owl experienced for its then-$36 billion flagship fund.
Implications
The move to cap redemptions at 5% for the Bcred fund reflects a shift toward managing liquidity and investor flows within large, privately managed credit pools. Blackstone's change of course - from honoring all requests in March to imposing a ceiling this quarter - underscores the operational and market pressures facing managers of sizable private-credit portfolios.
Reporting on financial figures is based on the company's disclosures regarding redemption volumes and its stated cap; no additional information beyond those disclosures has been added.