Blackstone's $43bn Blackstone Private Credit Fund faced redemption requests at 10 per cent of its value in the third quarter, matching the previous quarter's level. The firm will continue to limit withdrawals to 5 per cent of the fund's value, meaning half of investors seeking to exit cannot do so. This reflects persistent pressure on private credit funds exposed to highly leveraged software companies financed during 2020-2023 buyouts. Blackstone disclosed a $2.3bn backlog of unfilled redemption requests from the second quarter, noting a significant portion of those investors resubmitted paperwork in August. The company stated investors seeking liquidity in the last two quarters received approximately 75 per cent of requested capital within about 90 days.

Outflows from business development companies are closely watched as a gauge of appetite for risky corporate loans. The private credit industry, now a critical capital source for private equity leveraged buyouts, faces tests on technology loans as AI's impact on acquired software businesses remains uncertain. Trading activity shows investors bracing for losses, with a Pitch Book LCD index of software loans quoted below 90 cents on the dollar. An FT analysis found troubled loan values at major private debt investors have slipped to 2017 levels, with funds taking large writedowns. Peers Blue Owl and Ares Management face similar exposure.