Blackstone (NYSE: BX), is in the final stages of raising about $400 million for its Blackstone Private Credit Fund, a non-traded business development company commonly referred to as “BCRED,” to secure additional investment advantage, the Financial Times reported on Thursday.
The New York-based alternative investment manager is planning to raise funds through collateralized loan obligations secured by the loans held by its flagship $52 billion private credit fund, the report added, citing documents viewed by the newspaper.
The private equity firm will sell loans that BCRED owns to the CLO to enhance competitiveness, FT said. It will also sell debt from software maker Zendesk, cyber security business Mimecast and Unified Women’s Healthcare, according to the report.
Blackstone, which is also the sponsor of the mammoth non-traded Blackstone Real Estate Income Trust (BREIT) has faced twelve straight months of excessive investor redemption requires, leading the REIT to limit redemptions to the preset monthly limit of 2% of the fund’s net asset value and quarterly limit of 5% of NAV since November 2022.
In October 2023, BREIT received $2.2 billion in requests under the repurchase plan. This represents a 58% decline from the peak in January 2023. In accordance with their repurchase plan, BREIT fulfilled approximately $1.3 billion, which is equal to 2% of NAV and represents 56% of the shares submitted for repurchase. BREIT says this is the highest payout percentage since proration began.
In a recent stockholder update, BREIT announced that the company has returned $12.5 billion of liquidity to investors since Nov. 30, 2022, when proration began, while “maintaining strong performance.”
(Reuters contributed to this report.)