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Blackstone Private Credit Fund Earnings Double the Private Credit Market

Blackstone Private Credit Fund Earnings Double the Private Credit Market. Alternative investments, Blackstone, Blackstone REIT, investment, NAV, net asset value, real estate, real estate investment trust, redemptions, REIT, share, shareholders
Blackstone Private Credit Fund Earnings Double the Private Credit Market. Alternative investments, Blackstone, Blackstone REIT, investment, NAV, net asset value, real estate, real estate investment trust, redemptions, REIT, share, shareholders

Blackstone’s (NYSE: BX) nearly $50 billion non-traded business development company, Blackstone Private Credit Fund or “BCRED,” announced that their portfolio companies’ earnings have grown at twice the pace of the broader private credit market during the past year. Specifically, BCRED reports that the company has delivered a 10.5% annualized distribution yield and generated 4.1% of total return, bringing year-to-date return to 10.7% for Class I shares.

BCRED says it has generated increased interest income from its 98% floating rate debt portfolio.

Notably, BCRED’s 2021 vintage deals have exhibited EBITDA growth of 23% since close, which has performed in line with 2022 vintage deals with 24% growth. Across the portfolio, companies’ earnings are approximately 60% higher than cash interest paid.

Through Blackstone Credit’s Value Creation program, to which BCRED portfolio companies have full access, the company says it has generated more than $500 million in revenues through cross-sell introductions and created over $3.5 billion of implied enterprise value across Blackstone Credit. As a lender, the company says the Blackstone Credit Value Creation program helps “de-risk our investments and protect investor capital.”

Rising base rates and credit spreads lifted BCRED’s average yield on new investments to 12.1% during the third quarter, compared with 7.1% during the fourth quarter of 2021. In the third quarter, BCRED’s earnings yield remained a strong 12.6%, well above the fund’s 10.5% annualized distribution yield.

The company says it currently has $48.4 billion in total assets, a 43% loan-to-value rate and is diversified across 52 industries.

BCRED says commercial bank retrenchment, high lending rates, and lingering capital market uncertainty continue to support a “favorable backdrop” that they are “poised to capitalize on.”

As The DI Wire previously reported in September 2023, BCRED raised $2.4 billion year-to-date through the third quarter, up more than 30% over the entire second quarter, according to a letter to investors.

As of June 30, 2023, the fund’s aggregate NAV was $23.8 billion, the fair value of its investment portfolio was $47.7 billion, and it had $24.4 billion of debt outstanding (at principal). The fund has raised approximately $30.5 billion in equity since inception.

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