Alts weaken as Blackstone's flagship private credit fund hit by surge in redemptions

Some alternative asset managers fall premarket after surge in redemption requests hit Blackstone's BX.N flagship credit fund, BCRED

Blackstone BX.N slides 5%, Ares Management ARES.N down 4.8%, KKR KKR.N falls 3.5%, Blue Owl Capital OWL.N slips 5.5% and Apollo Global Management APO.N down 3%

BCRED Q1 redemptions totaled 7.9%, exceeding 5% of shares typically available for repurchase

"This was above investor expectations based on our conversations," Barclays analyst Benjamin Budish says; adds it should weigh on shares across alternative asset managers

"Credit performance has generally been solid across the BDCs; however, at the very least, we anticipated flows to worsen in Q1, including both softer gross sales and heightened redemptions," Budish says

Anxiety has climbed in private credit market due to questions about valuations and transparency, while broader credit quality concerns were fanned by two bankruptcies last year