Blackstone also imposes "redemption limits"! Redemption requests for its flagship private credit fund surge to 10%, raising market liquidity concerns again.

```

Blackstone Group's flagship private credit fund, with $79 billion in assets, has triggered its redemption cap for the first time, reflecting growing liquidity pressure in the private credit market.

According to reports, Blackstone Private Credit Fund (BCRED) received redemption requests amounting to 10% of the fund's shares in the second quarter, exceeding the quarterly redemption cap of 5%. The company has thus set the actual allowable redemption ratio for this quarter at 5%. This is the first time BCRED has activated its redemption restriction mechanism since its establishment. Blackstone's COO and President Jon Gray previously stated that the redemption cap is a “feature, not a bug” of such products.

This redemption restriction has further intensified market concerns regarding the liquidity of private assets. This week, Swiss asset management firm Partners Group also announced restrictions on redemption requests for its European private equity products and warned that redemption pressure is spreading from the private credit field to private equity.

Redemption Pressure Continues to Rise, Blackstone Emphasizes Liquidity Restrictions as Product Features

According to Bloomberg, BCRED faced record redemption pressure in the first quarter—investors applied to redeem about 7.9% of the $7.9 billion, equivalent to approximately $3.8 billion. At that time, Blackstone raised the quarterly redemption cap and used executives’ own funds to fill the gap, ultimately meeting all redemption requests.

Entering the second quarter, redemption requests further increased to 10%, exceeding the fund’s usual cap of 5%. In a letter to shareholders, Blackstone stated that redemption requests showed signs of slowing in the latter half of the offer period. Despite about $1 billion in inflows in the first quarter, BCRED still experienced net capital outflows after covering redemptions.

A spokesperson for Blackstone said, the ability to restrict redemptions is a “fundamental feature” of these products, and investors exchange some liquidity for long-term excess returns. BCRED emphasized that since its inception, its annualized total return has reached 9.3%, outperforming the leveraged loan market.

Industry Redemption Wave Spreads, Multiple Institutions Set Limits

BCRED’s situation is not unique. According to Bloomberg, in the $1.8 trillion private credit market, redemption requests this quarter are expected to further increase, and previously limited investors are ramping up efforts to withdraw funds.

This week, asset management firm Cliffwater LLC also set its redemption cap at 5%, while investor redemption requests previously reached as high as 17%. Swiss asset management firm Partners Group on Thursday stated that it is prepared to impose redemption restrictions on more of its funds and warned clients that redemption pressure is spreading from private credit to private equity. The company’s CEO David Layton said that the original intention of liquidity mechanism design is to protect long-term investors, ensuring returns are driven by the quality of underlying assets, not short-term capital flows.

Meanwhile, according to CNBC, Pacific Investment Management Company (Pimco) CIO Daniel Ivascyn warned last week that the credit industry will face higher losses. “A lot is happening beneath the surface,” he said. “We believe a sustained default or loss cycle is happening for the first time in years.”

Risk Warning and DisclaimerThe market carries risks, and investment should be cautious. This article does not constitute personal investment advice, nor does it consider the special investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article fit their specific circumstances. Investment based on this content is at your own risk. ```