Blackstone Inc.

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Blackstone Inc. stock analysis BX overview
Bearish -50

Blackstone, Partners Group cap withdrawals as redemptions rise amid private markets strain

📉 Partners Group flagged increased withdrawal requests from its funds while Blackstone capped withdrawals at its flagship private credit fund.

💸 Repurchase requests at Partners' $16 billion Delaware-based fund reached 6% of assets, exceeding the 5% quarterly limit and triggering a cap on withdrawals.

🏦 The middle-market alternative asset manager overseeing $185 billion is facing industry-wide volatility across open-ended evergreen funds starting with private credit.

📊 Blackstone capped withdrawals at its flagship private credit fund as redemption requests jumped to 10% in the second quarter compared to 7.9% previously.

🚫 Unlike last quarter, Blackstone and employees did not invest to meet all requested redemptions, limiting withdrawals to the customary 5% limit for these vehicles.

📉 Partners Group limited withdrawals from its $8.6 billion private equity fund after redemption requests reached 9.8% of assets held in the Luxembourg-based SICAV.

🔮 Three other mature evergreen funds totaling $9.7 billion are estimated to see redemptions between 3.5% and 5%, according to Partners Group.

📈 Partners Group shares recovered somewhat after falling 16% to a six-year low on Wednesday following news of the redemption cap.

🌍 The slump in Partners Group shares caused peer asset managers in Europe including EQT, CVC Capital Partners, and Bridgepoint Group to see their shares fall.

🇺🇸 In the U.S., shares of major asset managers Blackstone, KKR, TPG, and Ares Management also fell before Blackstone's stock rose 7% on Thursday.

💬 Virinchi Narayan of Three Pins Capital noted that evergreen structures are difficult to fulfill and closed-ended structures remain the best approach for these funds.

📉 Cliffwater reported withdrawal requests at its flagship $31.3 billion private credit fund rose to 17% in the second quarter from 14% in the first quarter.

🔍 Investors are scrutinizing valuations, lending standards, and how software companies can handle AI challenges within private credit funds run by big asset managers.

📅 Redemption windows at key U.S. non-traded private credit funds for the second quarter began closing last Friday with market participants monitoring withdrawal rates closely.

🤝 Partners Group expects gross new client demand of $26 billion to $32 billion for 2026 supported by a large pipeline of fundraising opportunities across mandates.

Bullish Signals
  • Blackstone shares rose 7% on Thursday following the announcement that it capped withdrawals at its flagship private credit fund.
  • Partners Group expects gross new client demand between $26 billion and $32 billion for 2026, supported by a large pipeline of fundraising opportunities.
  • The confirmation of strong future demand helped Partners Group shares recover after falling 16% to a six-year low on Wednesday.
  • Blackstone stated that its fund structure is a fundamental feature where investors exchange some liquidity at times for long-term outperformance.
Risk Factors
  • Blackstone capped withdrawals at its flagship private credit fund after redemption requests jumped to 10% in the second quarter compared to 7.9% previously, limiting access to the customary 5% threshold.
  • Partners Group reported that repurchase requests at its $16 billion Delaware-based fund reached 6% of assets held, exceeding its standard 5% quarterly limit, prompting a cap on withdrawals.
  • Cliffwater also reported rising withdrawal requests at its $31.3 billion fund, increasing from 14% in the first quarter to 17% in the second.
  • Partners Group noted that while it capped withdrawals from its $8.6 billion private equity fund due to a 9.8% redemption request, shares plunged 16% to a six-year low before recovering somewhat.
  • Industry experts warn that the shift toward evergreen structures driven by investor demand for liquidity may be difficult to sustain under current market conditions, as these funds were originally designed with closed-ended structures in mind.
Full Analysis
Blackstone and Partners Group have capped withdrawals from their flagship private credit funds as redemption requests surge amid industry-wide stress in the alternative asset management sector. Partners Group reported that repurchase requests at its $16 billion Delaware-based fund reached 6% of assets held, exceeding its standard 5% quarterly limit, prompting a cap on withdrawals. Similarly, Blackstone capped withdrawals at its flagship private credit fund after redemption requests jumped to 10% in the second quarter compared to 7.9% previously, limiting access to the customary 5% threshold. The situation reflects broader volatility across open-ended evergreen funds, particularly in private credit and private equity, where investors are scrutinizing valuations and lending standards. Cliffwater also reported rising withdrawal requests at its $31.3 billion fund, increasing from 14% in the first quarter to 17% in the second. Partners Group noted that while it capped withdrawals from its $8.6 billion private equity fund due to a 9.8% redemption request, it expects gross new client demand between $26 billion and $32 billion for 2026. The news of these caps caused significant market reaction, with Partners Group shares plunging 16% to a six-year low before recovering somewhat on Thursday, while peers like EQT, CVC Capital Partners, Bridgepoint Group, Blackstone, KKR, TPG, and Ares Management also saw share price declines. Industry experts warn that the shift toward evergreen structures driven by investor demand for liquidity may be difficult to sustain under current market conditions, as these funds were originally designed with closed-ended structures in mind.