Blackstone Bcred Record Redemptions

Comments

• Sven

  March 3 edited March 3

  It is only $1.8 billion from the flagship PE fund. Something is brewing in the horizon and it smells like a 2008 all over again.
• rforno

  March 3

  Sven said:

  It is only $1.8 billion from the flagship PE fund. Something is brewing in the horizon and it smells like a 2008 all over again.

  Agreed 100% .... batten down the hatches while you have time....
• WABAC

  March 3

  Sven said:

  It is only $1.8 billion from the flagship PE fund. Something is brewing in the horizon and it smells like a 2008 all over again.

  I don't think the PE market is as big as the real-estate market was. We haven't seen anything like NINJA loans. But it's not likely to be an easy unwinding given elevated asset prices and on-going inflation.
• yogibearbull

  March 3

  FWIW, the newer Bcred net assets ($82 billion) are higher than that for older Breit ($53 billion). Both have higher gross assets.
  Private-credit market is more specialized than the real estate market.
• Sven

  March 3

  Hope this is not a tip of an iceberg. I recalled mortgage companies such as Countrywide and Washington Mutual started to collapse, then came banks who own lots of subprime mortgage packages. One failed sector spread to another before the entire financial sector fell.
  .
• Shostakovich

  March 3

  Wouldn't you know it, just as private credit funds have been hitting the retail market!
• rforno

  March 3

  Shostakovich said:

  Wouldn't you know it, just as private credit funds have been hitting the retail market!

  Why do you think they're doing that? They can't find any willing buyers in the financial industry, so they're trying to fob it off on the 'dumb' money instead....
• Observant1

  March 3 edited March 3

  "I recalled mortgage companies such as Countrywide and Washington Mutual started to collapse,
  then came banks who own lots of subprime mortgage packages."
  
  Washington Mutual (WaMu) was the largest savings and loan association in the U.S.
  I was a happy WaMu customer since 1991 or 1992.
  Kerry Killinger (CEO) decided that the bank should get involved in the subprime market.
  This proved to be disasterous decision and led to the largest bank failure in U.S. history.
• Old_Joe

  March 3 edited March 3

  I was a happy WaMu customer since 1991 or 1992.
  
  Same here. Now I'm a semi-happy JPM customer, as they took over the big bank building one block away,
  
  We were also a very happy First Republic customer. JPM ate them too.
• Mark

  March 3

  @Observant1 @Old_Joe
  
  When WaMu went under did you have to renegotiate the terms of your mortgages with JPM or were they just continued as is? Mere curiosity.
• Old_Joe

  March 3

  Our mortgages were originally with the Hibernia Bank here in SF. Hibernia eventually wound up being eaten by BOA. Shortly after that I walked into the friendly old Hibernia bank branch, was grudgingly allowed to address the surly new BOA manager, and paid off the damned mortgage. That was well before WAMU.
• Observant1

  March 3 edited March 3

  Mark,
  
  I did not have to renegotiate the terms of my WaMu mortgage.
• rforno

  March 3 edited March 3

  Per BBG this evening:
  
  "More than 25 senior leaders from across Blackstone — many from its credit business — pitched in some $150 million to the Blackstone Private Credit Fund, according to people familiar with the matter. Combined with $250 million of the firm’s own capital, that helped cover a record redemption request of roughly $3.8 billion, or equivalent to around 7.9% of net assets.
  
  The money proved crucial in allowing BCRED, an $82 billion investing behemoth, to pay out investors without changing the terms of its tender offer — a move that investors could have perceived badly in this more febrile time."
  
  https://www.bloomberg.com/news/articles/2026-03-03/blackstone-senior-staff-opened-wallets-with-bcred-under-pressure?srnd=homepage-americas
  
  ... feels kinda like how Bear Stearns kept bailing out its hedge funds in 2007, maybe?
• Old_Joe

  March 3

  U'mmmm, yeah... it do, don't it?
• rforno

  March 5

  And now Blackrock...
  
  BlackRock Slashed Another Private Loan Value From 100 to Zero
  
  BlackRock Inc. slashed the value of a private loan to Infinite Commerce Holdings to zero, just three months after assessing it at 100 cents on the dollar.
  
  The loan, which is now worthless, marks the second sudden wipeout to recently hit BlackRock's private-credit division, highlighting a key fault line in private credit.
  
  The write-off adds to mounting concerns over defaults and underwriting standards in the private credit market, with top executives warning of a potential shakeout for private credit firms.
  
  https://www.bloomberg.com/news/articles/2026-03-05/blackrock-slashes-another-private-loan-value-from-100-to-zero
• Sven

  March 5

  Thanks for the update. Like Buffet used to say “when the tide goes out, you get to see what you are wearing.” Blackrock is the largest AUM, and Vanguard is second. Both signed on to private equity late last year. And they want to get access to 401(K)s and public funding ?
  
  The collapse of this private credit loan is analogous to the 2007’s subprime loans. The underwriting were weakened and banks bundled these risky subprime mortgages with good mortgages for sold them to investors worldwide. The credit ratings were therefore inflated, and created an illusion of safety. The house of cards or bank failure followed as GFC unfolded in 2008.
  
• Observant1

  1:29AM edited 2:48AM

  Blackstone, Apollo Global, KKR, BlackRock, and New Mountain wrote down loans at several large funds
  over the past two weeks.
  
  Publicly traded BDCs are trading at 82% of NAV—their largest discount since late 2022.
  
  
  
  
  
  Private, unlisted BDCs are experiencing an uptick in redemption requests.
  These vehicles, often referred to as semi-liquid funds, helped quadruple BDC assets since
  the end of 2020 while providing lucrative management fees for private investment firms.