Despite imposing limits on redemptions from its flagship private credit fund due to a surge in withdrawal requests, Blackstone Group LP shares surged more than 8% on Thursday, poised to end a three-session losing streak.
Regulatory filings show that Blackstone's $79 billion private credit fund received redemption requests in the second quarter amounting to 10% of the fund's total shares. In response, the firm set a redemption cap at 5%, meeting only a portion of investors' exit demands. In the first quarter, the fund faced a record wave of redemptions, with requests at 7.9% of shares, at which time Blackstone used its own capital to fulfill all withdrawal requests in full.
In a letter to shareholders, Blackstone indicated that redemption activity showed signs of slowing in the latter part of the latest tender offer period, with domestic market redemptions falling below the level of the previous quarter. The company also emphasized that the fund's capital position remains robust, with loan repayments and new subscription inflows exceeding the amounts paid out for fund repurchases.
Following the news, Blackstone shares fell approximately 4% on Wednesday but rebounded strongly at Thursday's open, with intraday gains exceeding 8% to a high of $119.42, marking the largest single-day increase since April 2025. Blackstone President and Chief Operating Officer Jon Gray had previously stated that redemption limits are a standard risk control feature for such products and not indicative of a flaw.
Driven by sector-wide momentum, shares of other asset management firms also moved higher. Ares Management rose about 6%, KKR & Co. gained around 6%, and Apollo Global Management advanced approximately 2%. Analysts noted that investors appear to be gradually digesting the negative sentiment surrounding liquidity pressures in private markets, shifting their focus back to the long-term value and solid fundamentals of leading firms like Blackstone.
Comments