Blackstone is planning to borrow hundreds of millions of dollars to give its flagship private credit fund added investment firepower, as the asset manager taps a new source of leverage that it and rivals aim to increasingly exploit in the years to come.
The private equity behemoth is in the final stages of raising just under $400mn through a so-called collateralised loan obligation secured by the very loans held by its $52bn Blackstone Private Credit Fund, known as BCRED, according to documents obtained by the Financial Times.
Blackstone’s ability to clinch the financing package underscores how big credit investors are comfortable with the risks in this opaque but rapidly growing corner of financial markets, even as higher interest rates heap pressure on companies across the US and portfolio managers pencil in an increasing number of defaults.