Investors Keep Putting Money Into Private Credit

Investors Keep Putting Money Into Private Credit
Investors Keep Putting Money Into Private Credit


Key flows of money into private-investment vehicles seem to be stabilizing, boosting shares of managers.

Big banks are worried that more lending might migrate away from them in the coming years. Investors big and small are taking notice.

The boom in alternative assets has been a big winner for managers of those funds in recent years, as things such as bespoke corporate lending take share from what has traditionally been the business of banks. However, one recent wrinkle has been a worry that the people supplying money to those funds might not keep pouring in cash as interest rates rise—especially when it comes to wealthy individuals, one of the major sources of growth.

Yet there are indicators the spigot isn’t closing. A jump in redemption requests late last year for the Blackstone Real Estate Income Trust is what initially spooked investors. But Breit has lately reported diminishing redemption requests: August requests of just under $3 billion were the lowest since last October, more than 40% below the January peak and the fourth straight month of slowing requests.

Even if certain funds—including more traditional private-equity buyout funds facing a tough deal-making environment—might not be seeing strong inflows, funds in other assets are making up for some of that. The Blackstone Private Credit Fund said inflows into the nontraded vehicle were $2.4 billion in the third quarter reported so far, up 30% from the prior quarter.

Blue Owl Capital reported figures for two nontraded private credit funds, Blue Owl Credit Income Corp. and Blue Owl Technology Income Corp., that point toward a net $1 billion-plus inflow for the third quarter, better than the pace of the second quarter, according to estimates by Autonomous Research analyst Patrick Davitt.

Even within real estate, despite concerns about office and other property values, some strategies are still attracting inflows: The Blue Owl Real Estate Net Lease Trust, which is in the expanding market for the sale and lease-back of properties, has reported raising over $1 billion since its launch in 2022.

Money from wealthy individuals has been a growing source of funding for private credit and other “alternatives" to traditional stocks and bonds. Apollo Global Management told analysts last week that it raised $6 billion via retail last year, and is “well on track" to be raising $15 billion-per-year by 2026.

The usual sources of funds—giant institutions—also remain active in key areas. Blue Owl this week said it got a billion-dollar commitment for technology lending from Abu Dhabi sovereign fund Mubadala Investment. Mubadala and Ares Management earlier this year announced a joint venture related to private-credit investments.

All of this is helping rebuild momentum in shares of the managers of these platforms. Apollo, Ares, Blackstone and Blue Owl shares are all up at least 9% so far in the third quarter, well outpacing a less-than-3% gain for S&P 500 financials overall. The inclusion of Blackstone—whose shares are up 22% in this period—in the S&P 500 index likely also boosts the visibility of these firms with individual investors.

Investors who are now in these private-credit funds of course might have other concerns, like how these vehicles’ returns might perform if there were an economic slowdown. But for now, owning shares of their managers is working out better than feared.

Write to Telis Demos at

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