More financial doubts in the US: the giant Blackstone also limits money withdrawal from a private credit fund

BarcelonaThe North American investment multinational Blackstone has limited the withdrawal of money from investors in its main private credit fund following a surge in investment liquidations. This is another case of massive money withdrawals from an investment vehicle dedicated to private credit, a branch of the financial industry that has been showing problems in recent months in the United States, where it operates as a shadow banking sector. shadow banking.

Specifically, the affected fund is the Blackstone Private Credit Fund, or Bcred, the largest in the financial giant's portfolio dedicated to private credit. Given the sharp increase in withdrawal requests from investors, Blackstone has decided to limit withdrawals to a maximum of 5% of the total funds deposited in this vehicle for each investor. The decision was made after detecting the outflow of approximately 10% of the money invested in this vehicle. "In the second quarter, repurchase requests represent approximately 10% of outstanding shares, and as anticipated, Bcred will honor repurchase requests representing 5% of outstanding shares," it stated in a letter to investors, as reported by Europa Press.

Despite this, Blackstone, one of the world's largest investment firms, has assured that Bcred's liquidity exceeds $15 billion and that its capitalization is "solid," partly thanks to capital inflows exceeding outflows. In the first quarter, the New York-based group had already allowed investors to make their requested money withdrawals effective, a point at which the threshold of 5%, beyond which the fund's management is permitted to halt capital outflows, had already been surpassed.

According to the British newspaper Financial Times, Bcred manages an investment portfolio of $79 billion, although this year it has had to account for the devaluation of some of its assets as losses, as well as loans it had extended to a couple of software companies and dental clinics.

The private credit sector (or private credit, in English) has raised some alarms this year due to large capital outflows from some funds, which have forced the companies managing them to limit them. In March, another US financial giant, BlackRock, already limited money withdrawals from its flagship fund, a measure also taken by other US financial institutions, such as investment firms KKR, Apollo, or Ares Management.

On Thursday, the Financial Times itself reported that the Swiss investment group Partners Group is also considering limiting money withdrawals from one of its US-based funds, a measure it has also taken with a European fund. Likewise, Cliffwater, another investment group, recently explained that, in the first three months of this year, capital outflows from its private credit funds exceeded 17% of the total invested.

An shadow banking

Funds like Bcred are vehicles where investors (individuals or corporate) put money that the fund itself uses to provide credit to other companies. In other words, they operate like a bank, but outside the traditional banking sector and, by extension, also outside the reach of banking regulators, such as the Federal Reserve, the central bank of the USA.

Private credit has a much more limited weight in Europe, but in the United States it is a sector with important investors. Specifically, the danger is that large traditional banks have used these instruments, with which they have an exposure of 1.2 trillion dollars. This means that if problems in private credit worsen, the entire North American financial industry could suffer.

Loans from private credit funds to technology and IT companies are one of the points of doubt among investors, especially for companies related to artificial intelligence, as doubts grow about the viability of many companies dedicated to this new technology and fears of a speculative bubble around this industry.