The firm tops forecasts and backstops BCRED with US$400m as withdrawals surge
Private credit just faced a major stress test — and big institutions kept putting money to work.
According to Reuters, Blackstone raised US$68.5bn in new assets in the first quarter and pushed total assets under management past US$1.3tn, even as returns in core strategies softened and redemptions surged at its flagship private credit funds.
Blackstone remains at the centre of the private credit boom that many pensions and insurers have leaned into.
Chief executive Stephen Schwarzman said institutional and insurance clients, who account for 75 percent of the firm’s credit platform assets under management, “have continued to commit large-scale capital to the asset class” despite “external noise.”
He described an “intensely negative campaign” against private credit.
That institutional support came as one of Blackstone’s key vehicles, the US$45bn US‑focused Blackstone Private Credit Fund (BCRED) retail private credit fund, absorbed heavy redemption pressure.
Redemptions in BCRED reached 7.9 percent of net assets in the quarter, above a 5 percent cap that would have allowed Blackstone to limit withdrawals, according to the Financial Times.
Instead of gating the fund, Blackstone and its employees invested more than US$400m so BCRED could meet all redemption requests.
Its BCRED recorded US$3.7bn in withdrawals and net outflows, mostly from a few large investors, Reuters said.
President Jonathan Gray likened it to “the bigger boulders as opposed to the pebbles” moving, and said most smaller investors tend to stay in the product for the long term.
Returns told a more subdued story.
Blackstone’s private credit funds on average delivered zero net returns after fees in the first quarter and its large portfolio of bank loans lost 1.4 percent, which ranked among the lowest-ever returns for its credit and insurance unit, now managing US$457bn, the Financial Times reported.
Over the past 12 months, private credit funds earned a 5.7 percent net return, roughly half the level a year earlier.
Yahoo Finance said returns from the private credit business fell to 0.6 percent from 2.7 percent in the same quarter last year.
As per the Times, Gray said the firm marked the bottom 5 percent of loans in its private credit funds at 70 percent of par value, though the strategies have outperformed the leveraged loan index in the quarter and since inception.
Performance in other asset classes also cooled.
The same outlet said Blackstone’s flagship private equity funds posted gross returns of 3.2 percent in the quarter, down from 5 percent in late 2025.
Its three latest flagship buyout funds delivered net returns of no more than 12 percent, below the 15 percent–20 percent range many large private equity groups seek.
Real estate funds for institutional investors lost 1 percent before fees in the quarter and are negative over the past 12 months, while “core+” perpetual property vehicles recorded slight gains.
Infrastructure remained a clear outlier.
The infrastructure unit, initially mostly backed by Saudi Arabia’s sovereign wealth fund and now home to much of Blackstone’s data centre and energy infrastructure exposure, delivered gross returns of nearly 8 percent in the quarter and nearly 25 percent over the last 12 months.
The group has invested more than US$150bn in data centres and expects future developments to roughly double those holdings in coming years, the Financial Times said.
Fundraising and earnings nevertheless held up.
Over the past 12 months, Blackstone raised almost US$250bn, beating analysts’ expectations and supporting continued growth.
The credit and insurance unit attracted US$37bn of new inflows and private equity took in US$20.4bn, according to Reuters.
Distributable earnings rose about 25 percent from a year earlier to US$1.76bn, or US$1.36 per share, just above forecasts compiled by LSEG.
Yahoo Finance, which put total distributable earnings at US$1.8bn, also flagged a 26 percent drop in the credit and insurance division to US$373m.
Even so, public markets pushed back.
According to Reuters, Blackstone shares fell about 6 percent on Thursday, while peers KKR, Ares, Carlyle and Apollo dropped between 3.5 percent and 5 percent.
Yahoo Finance said Blackstone’s stock was down more than 7 percent on the day despite the stronger numbers.
Against that backdrop, senior policymakers and bank chiefs, including US Treasury Secretary Scott Bessent, Federal Reserve Chair Jay Powell and JPMorgan Chase chief executive Jamie Dimon, have said they do not view private credit as a systemic risk in itself, according to Yahoo Finance.
