Blackstone fund caps withdrawals after investor rush

Investors are pulling money from private markets at a faster pace, prompting Blackstone to limit withdrawals from its flagship private credit fund, BCRED.

The $79 billion fund received redemption requests equal to 10% of its shares during the second quarter, forcing Blackstone to cap withdrawals at 5%. 

BCRED had already faced heavy withdrawal requests earlier this year. In the first quarter, investors sought to redeem $3.8 billion, or 7.9% of the fund. Blackstone met those requests by increasing withdrawal limits and using employee capital.

Blackstone’s latest move has renewed concerns about liquidity in private markets, where assets are harder to sell quickly than publicly traded stocks and bonds.

The pressure is not limited to Blackstone. Private market firms saw their shares fall this week after Partners Group restricted withdrawals from one of its European private equity funds and warned that demand for cash is spreading across the industry.

Major investors warn of tougher conditions ahead. Pimco recently said the credit market could be entering its first prolonged period of defaults and losses in many years, raising concerns about the health of private lending investments.