Blackstone has been paying full amounts requested from its BCRED private credit fund, but the strain of meeting redemption requests is now too great, and it is limiting redemptions to 5%. The Wall Street Journal’s Matt Wirz reports:
Blackstone will limit redemptions from the $79 billion fund to 5%, a reversal from its strategy in March when it opted to pay the full amount requested. The about-face highlights rising financial strain on managers of large private-credit funds marketed to individual investors who continue to ask for their money back.
What is somewhat concerning here is that BCRED is known in the industry as one of the largest and most liquid private credit funds. Its troubles meeting redemption requests imply that even massive funds can’t withstand the pressure of heightened periods of redemptions. The risk Your Survival Guy has been warning about is in the forthcoming insertion of private equity and credit funds into 401(k) accounts. What will restricted liquidity mean for retirees who have to wait to withdraw their funds?
Action Line: Be very diligent about any investments in your 401(k). And when you decide you want different management, email me at ejsmith@yoursurvivalguy.com, and we’ll talk about an IRA rollover. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.
Read the entire series here.
