BCRED Class I Up 0.3% in Q2; Class S Down 3.4% With Sales Load

Blackstone Private Credit Fund reported a narrow 0.3% total net return for Class I shares in the second quarter as net asset value per share fell for a fourth consecutive quarter. The results follow the departures of two senior executives in the past two months.

The nontraded business development company, known as BCRED, attributed the quarter’s soft return to unrealized markdowns, roughly half of which it said reflected broader market spread widening and the remainder company-specific underperformance in the portfolio. Reinvested distributions offset a steeper decline in the underlying share price: NAV per share fell to $23.65 as of June 30 from $24.19 at the end of the first quarter, marking a fourth consecutive quarterly decline. The figures are based on unaudited valuations of the fund’s portfolio, which BCRED said may be subject to later adjustment.

Returns were tighter across share classes before sales charges than after them. Class S shares returned 0.1% for the quarter and Class D shares 0.2%, excluding upfront placement fees. For investors who paid the maximum placement fee, the same classes returned -3.4% and -1.3%. Class I, the class BCRED cites in its performance commentary, carries no upfront placement fee. Year to date, Class S returned -0.2% excluding placement fees and -3.7% including them, while Class D returned 0.1% and -1.4%.

Some credit metrics improved. Non-accruals stood at 2.2% of the portfolio at cost and 1.1% at fair value, down from 2.4% at cost as of March 31, which was reported in April. Available liquidity, made up of cash and undrawn borrowing capacity, rose to more than $17 billion from more than $15 billion in the first quarter. The fund’s $2.7 billion of loan repayments and roughly $1 billion of subscriptions during the quarter together represented 165% of shares accepted for repurchase, up from about 160% in the first quarter, according to BCRED.

The update follows a difficult stretch for BCRED’s leadership. AltsWire reported that Jonathan Bock resigned as co-chief executive officer of BCRED and Blackstone Secured Lending Fund (NYSE: BXSL) effective July 20, roughly a month after chief operating officer Katherine Rubenstein departed on June 15. Brad Marshall, who had shared the chief executive title with Bock, now serves as sole CEO of both funds; both funds said Bock’s departure was not the result of any disagreement over operations or policies.

BCRED has faced sustained redemption pressure through 2026. The fund met a then-record 7.9% of shares in first-quarter redemption requests, or roughly $3.8 billion, by upsizing its repurchase cap to 7% and deploying about $400 million of Blackstone and employee capital, AltsWire reported in March.

Second-quarter demand reached approximately 10% of shares outstanding, which the fund prorated at its standard 5% cap. BCRED also cut its monthly distribution to $0.18 per share for July, its second reduction in nine months. On Blackstone’s July 23 second-quarter earnings call, the company said BCRED continued to see elevated repurchase requests but that redemption pressure eased heading into the third quarter.

BCRED’s roughly $78 billion portfolio remains concentrated in privately originated senior secured loans, with senior secured debt representing 97% of debt investments and an average loan-to-value of 41% at underwrite, according to the fund. Payment-in-kind income fell to 5.6% of total investment income from 7.0% in the first quarter. The portfolio carried a weighted average mark of 95.4 at quarter-end, with the bottom 5% of private debt investments marked at an average of 63.4. The fund deployed $1.8 billion during the quarter, including a commitment to a Blackstone-led $10 billion financing for Firmus Technologies, an AI infrastructure platform.

Blackstone Private Credit Fund is an externally managed nontraded BDC advised by a Blackstone subsidiary, investing primarily in floating-rate senior secured loans to U.S. middle-market and larger corporate borrowers.

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