The US investor is struggling with a real estate and a loan fund with capital outflows. Now the start of the private equity fund is also to be delayed.
(Photo: Reuters)
Dusseldorf According to a media report, the US investor Blackstone has warned of possible delays in the launch of a new private equity fund for wealthy clients after capital outflows. Blackstone has given investors and advisors relevant information in the past few days, the Financial Times (FT) reported on Saturday, citing people familiar with the matter.
The asset manager has indicated that it will wait until financial market conditions improve before launching the Blackstone Private Equity Strategies Fund (BXPE). Blackstone declined to comment on the report.
According to a report by the business news agency Bloomberg, this fund was not aimed at institutional investors, but rather at wealthy private investors. “Blackstone plans fund for people with millions, not billions,” reads the headline.
One reason private equity firms are targeting smaller investors is that institutional fundraising is overcrowded. One benefit of creating a perpetual vehicle that allows individuals to come and go is that it creates a longer-term source of fees.
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The investor is already struggling with a real estate fund and a loan fund with capital outflows. The development has left its mark on the Blackstone share price. In the past four weeks, the stock has lost a quarter of its value, while the US stock market barometer has been flat over the period.
Blackstone’s problem: Customers are withdrawing funds
BCRED, a Blackstone-run private debt fund that has $50 billion under management, according to Bloomberg, has reached its limit on quarterly client money recoveries, according to a regulatory notice.
Just last week, Blackstone had to limit repayments from its $69 billion real estate fund Blackstone Real Estate Income Trust (“Breit”) for similar reasons. Investors in the real estate fund had previously tried to withdraw too much money from the fund.
In the case of BCRED, Blackstone previously emphasized that all customer take-back requests would be met. The fund has $8 billion in cash and has had net inflows in the current quarter.
Regulators are currently watching all signs of tension in the financial markets very closely, also because they fear that the interest rate hike initiated by the major central banks could cause abrupt movements in the markets. The experts at the Bank for International Settlements also see risks in the so-called shadow banks. All players in the financial markets, who do similar business to banks but are not as strictly regulated, fall into this category.
More: Private banks lure rich customers with investments away from the stock market