Blackstone Private Credit Limits Redemptions: It's "a Feature, Not a Bug"
Key takeaways
- BX OWL NVDA PGHN.SW Making high-interest rate loans to smaller companies is inherently risky.
- For example, Blackstone (NYSE: BX) just limited redemptions from its flagship Blackstone Private Credit fund to 5% of shares after receiving redemption requests for 10%.
- In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia.
BX OWL NVDA PGHN.SW Making high-interest rate loans to smaller companies is inherently risky. When times are good, making such loans can be highly profitable. When times are tough, smaller companies can struggle to repay their loans. Right now, Wall Street appears concerned that small companies are set to struggle, as evidenced by the number of private credit funds limiting redemptions.
For example, Blackstone (NYSE: BX) just limited redemptions from its flagship Blackstone Private Credit fund to 5% of shares after receiving redemption requests for 10%. Other asset managers have been doing the same thing, including Blue Owl Capital (NYSE: OWL) and Europe's Partners Group. This is clearly a widespread phenomenon.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »