Blackstone Inc’s flagship private credit vehicle BCRED experienced a slowdown in fundraising momentum and an increase in investor redemption requests in the first quarter, as sentiment toward private credit came under pressure, according to a report by Reuters.
The report cites company disclosures as revealing that gross inflows into the approximately $80bn fund eased to $1.9bn during the period, while repurchase requests rose to $3.2bn, reflecting more cautious investor positioning amid market volatility and heightened scrutiny of the asset class.
The firm attributed the backdrop to a combination of geopolitical uncertainty, concerns around artificial intelligence-related valuations, and broader reassessment of private credit risk, particularly within non-traded business development companies.
Despite the shift in flows, BCRED reported that it maintained sufficient liquidity to meet redemption demand during the quarter. The fund highlighted more than $15bn in available liquidity sources, including roughly $7bn in financing capacity, supported in part by capital commitments from Blackstone Inc. and senior leadership investment.
The fund also reported a 9.8% annualised distribution rate for the period, underscoring continued income generation even as capital flows moderated.
Credit quality metrics showed some deterioration. Non-accruals increased to 2.4% of the portfolio at cost, up from 0.6% previously, driven largely by stressed exposures including Medallia and Affordable Care. Meanwhile, payment-in-kind income declined to 7.0% from 7.8%, a move often interpreted as a sign of easing borrower stress but also reduced reliance on non-cash interest structures.
The report noted that institutional investors continue to represent the majority of capital in the strategy and remain active allocators to private credit despite near-term volatility. However, the quarter’s flow dynamics highlight a more selective environment following years of rapid expansion in the asset class.
