After Real Estate Fund, Blackstone Private Credit Fund Also Hits Withdrawal Limit

Blackstone Inc.’s (NYSE: BX) announced that its $50-billion Blackstone Private Credit Fund (BCRED) has also reached its pre-set limit for the first time after its $69-billion real estate fund also exceeded its limitations for the quarter.

Since Blackstone debuted the product in January of last year, this is the first time redemption requests have exceeded the pre-set limit of 5%.

According to a regulatory filing, the non-traded business development company received withdrawal requests from its investors totaling approximately 5% of the fund’s outstanding shares in the fourth quarter that concluded on Nov. 30.

Nevertheless, all redemption requests submitted to BCRED will be honored, according to Blackstone, and the fund has $8 billion in immediate liquidity. Investors will still be allowed to cash out on their investments.

“BCRED is well positioned with 100% floating rate and 94% senior secured loans and zero payment defaults,” a Blackstone spokesperson said in a statement.

This follows the BREIT withdrawal requests exceeding the monthly limit of 2% of net asset value and the quarterly maximum of 5%. The withdrawal structure of the fund is intended to prevent a liquidity mismatch.

“If BREIT receives elevated repurchase requests in the first quarter of 2023, BREIT intends to fulfill repurchases at the 2% of NAV monthly limit, subject to the 5% of NAV quarterly limit,” BREIT said in a letter announcing the curb on withdrawals.

Fellow real estate fund, Starwood Real Estate Income Trust, a nontraded trust, is also capping redemptions after investor withdrawal requests exceeded the REIT’s monthly maximum in November.

Blackstone last traded at $78.73 on the NYSE.

Information for this briefing was found via Reuters, Barron’s, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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