Blackstone limits withdrawals after requests hit 10% of its private credit fund amid rising default risks for smaller firms.
Blackstone has restricted redemptions from its Blackstone Private Credit Fund to 5% of shares after receiving requests for 10%. The move follows growing concerns over smaller companies’ ability to repay high-interest loans as rates rise and recession fears mount.
Other asset managers, including Blue Owl Capital and Partners Group, have taken similar steps, signaling broader stress in private credit markets. Ares Capital’s first-quarter update showed non-accrual loans rising to 2.1% of its portfolio, a modest but concerning increase.
Rising interest rates, potential recession risks, and AI-driven disruptions in the software sector are heightening default risks for smaller borrowers, prompting fund managers to act preemptively.