Jon Gray, President and COO of Blackstone, addressed recent investor concerns during the Axios BFD event in New York City on October 12, 2023.
On Tuesday, Blackstoneās President Jon Gray defended the loan quality of the firm's flagship private credit fund following investors' withdrawal of nearly 8% from the fund in the last quarter.
The alternative asset management firm disclosed in a late Monday filing that it had allowed investors to withdraw 7.9% from BCRED, which it claims to be the largest private credit fund globally, managing approximately $82 billion. This action was facilitated partly by permitting the firmās own investors to inject $150 million into the fund.
This decision led to a sell-off in Blackstone shares, which dropped by about 8.5% during Tuesday morning trading, affecting other private credit peers as well.
In an interview with CNBC's David Faber, Gray stated, "When you think about credit quality, the 400-plus borrowers here, they had 10% EBITDA growth last year. So when we look at this, we feel pretty darn good," referencing a term related to the financial performance of a company.
Despite efforts to reassure investors, recent actions by alternative asset managers permitting investor cash-outs have exacerbated concerns about private credit and loans, especially within the software industry. The situation escalated last month when Blue Owl announced it had secured buyers for $1.4 billion of its loans, partially to facilitate a 30% cash-out from a beleaguered credit fund.