Blackstone Wealth Sales Near $9B as BCRED Outflows Widen to $1.4B
Blackstone Private Credit Fund, or BCRED, recorded $1.4 billion in net outflows in the third quarter, up from $1.2 billion in the second quarter, even as sibling vehicle Blackstone Real Estate Income Trust, or BREIT, posted its best regular-way net flows in four years, executives at Blackstone Inc. (NYSE: BX) said on the firm’s Oct. 22 earnings call.
Blackstone’s private wealth business grew assets under management 15% year over year to a record $330 billion, with nearly $9 billion in sales during the quarter, compared with $324 billion and $8.6 billion in the second quarter. President and chief operating officer Jon Gray said fundraising for the firm’s perpetual strategies rose materially from the second quarter despite the slowdown in credit.
BCRED Outflows Widen as Backlog Carries Over
The nontraded business development company reported gross sales of nearly $750 million in the third quarter, down from $1 billion in the second quarter. Repurchase requests, which Gray said were largely driven by carryover from the second quarter, equaled 10% of net asset value, twice the fund’s 5% quarterly limit. The fund fulfilled approximately 50% of total requests.
Investors who sought redemptions in both prorated quarters received 75% of their capital back in about 90 days, Gray said, calling it “another illustration of the semi-liquid structure working as designed.”
AltsWire reported Sept. 3 that third-quarter requests totaled an estimated $4.3 billion, roughly 10% of shares outstanding – the third straight quarter in which demand topped the fund’s cap. On Blackstone’s July 23 call, Gray said redemption requests were down materially early in the third quarter. Blackstone has said BCRED requests remained elevated in large part because of heightened press and market attention around private credit, as well as concerns about decelerating performance, and that net flows were likely to remain under pressure. Executives did not give an outlook for fourth-quarter BCRED requests on Thursday’s call.
BCRED’s NAV per share fell to $23.51 as of Sept. 30 from $23.65 at June 30, its fifth consecutive quarterly decline. Aggregate NAV fell to approximately $41.1 billion from $42.8 billion at June 30, the fair value of the investment portfolio was approximately $75.6 billion, and the fund had approximately $34.8 billion of debt outstanding. Shares accepted for third-quarter repurchase were priced at the Sept. 30 NAV, and the fund has said it will disclose the final dollar value of repurchases in November.
The NAV slide has coincided with mounting paper losses. AltsWire reported in August that BCRED booked $1.85 billion in net unrealized depreciation in the first half of 2026, more than triple its full-year 2025 total. The fund declared an October distribution of $0.18 per share, unchanged since a July cut that AltsWire reported in June, the fund’s second reduction in nine months.
Gray said BCRED’s borrowers posted double-digit growth in earnings before interest, taxes, depreciation and amortization, with debt service coverage ratios of 2.3 times, and described troubled legacy deals as a small minority of the portfolio. He said talk earlier this year of “some sort of private credit apocalypse” had not come to pass.
Vice chairman and chief financial officer Michael Chae listed an “inevitable and eventual stabilization” of retail flows in the BDC area among the drivers of Blackstone’s expected base management fee growth in 2027, while describing its timing as a variable. Blackstone’s direct lending AUM grew 10% year over year to nearly $170 billion despite muted flows for BCRED, and Gray said inflows from institutional investors remain strong.
BCRED is not the only large nontraded BDC still working through a backlog. AltsWire reported Sept. 22 that Apollo Debt Solutions BDC received third-quarter requests equal to about 14.7% of shares outstanding, down from 16.8% in the second quarter, and held repurchases at its 5% cap.
Separately, BCRED’s board recommended in September that shareholders reject an unsolicited tender offer from Cox Capital Retail Secondaries Fund I for up to $20 million of Class I shares at $20.65 per share, a 12.5% discount to the fund’s Aug. 31 Class I NAV of $23.60. The board said the offer substantially undervalues BCRED shares.
BREIT Extends Its Recovery
BREIT’s total assets under management grew 9% year over year to $58 billion, and the fund recorded its best regular-way net flows in four years in the third quarter, Gray said. AltsWire reported in July that BREIT’s second-quarter net flows were its best in nearly four years, extending a turnaround that began with the fund’s strongest capital raise in three years in the first quarter.
Blackstone reported $1.3 billion of capital raised in BREIT in the third quarter, a figure that includes proceeds from the fund’s Delaware statutory trust program, compared with $1.2 billion in the second quarter.
Gray said BREIT has generated 21 consecutive months of positive returns and approximately 11% net over the last 12 months for its largest share class. Class I NAV per share was $14.65 as of Sept. 30, up from $14.53 at June 30, with a 0.1% total return for September.
Gray said Blackstone raised valuation cap rates across its real estate holdings in the third quarter in response to higher base rates. Blackstone’s Core+ real estate funds, a category that includes BREIT, appreciated 1.6% in the quarter, while its opportunistic funds declined 3.2%. Chae said widening cap rates were partially offset by data center leasing and interest rate hedges, while lower-growth areas, including Blackstone’s multifamily housing portfolio, were more affected.
BREIT deployed $9.1 billion into data center development through its QTS platform in the first nine months of 2026 ($3.4 billion in the third quarter alone), up 129% from $4 billion a year earlier, the fund reported. The fund said those developments are 100% pre-leased, in substantially all cases to investment-grade tenants.
Chae said BREIT is back in growth mode with improving flows, helping offset other headwinds as Blackstone expects real estate base management fees to remain broadly stable through year-end and into 2027.
BXPE and BXINFRA Post Record Quarters
Blackstone Private Equity Strategies Fund Program, or BXPE, reported record sales of $2.9 billion in the third quarter, up from $2.4 billion in the second quarter, bringing its NAV to $29 billion. Gray said BXPE has produced an 18% net annualized return since inception.
Blackstone Infrastructure Strategies Fund Program, or BXINFRA, reported its highest quarterly sales since launch at $1.1 billion, up from approximately $900 million in the second quarter. That brought its NAV to more than $7 billion, with a 17% annualized net return for its largest share class, Gray said.
New Product Launches
Blackstone’s new perpetual hedge fund product, BXHF, raised approximately $400 million including Oct. 1 subscriptions, Gray said. The firm also launched Blackstone Private Markets Funds, or BXPM, a non-U.S. vehicle that invests across its wealth strategies.
The first two funds from Blackstone’s alliance with Wellington and Vanguard, which AltsWire reported in July launched the day before Blackstone’s second-quarter call, went live in the third quarter, Gray said. They are WVB All Markets Fund, which pairs Wellington’s public equity and Vanguard’s fixed income and index strategies with exposure to Blackstone’s perpetual private markets platform, and WVB Blackstone All Privates Fund, which gives U.S. investors access to Blackstone’s platform in a single allocation. The closed-end funds were initially available only through Merrill and Bank of America Private Bank advisers.
Gray said the administrative process governing alternatives in retirement plans is still underway in Washington and that clarity there would help expand access. The U.S. Department of Labor proposed a rule in March that would create a process-based fiduciary safe harbor for 401(k) plans that add alternative investments, following the August 2025 executive order.
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