Blackstone (NYSE:BX) has secured approximately $1 billion for its private credit continuation fund that allows existing investors to exit while the firm retains control of the underlying loan assets.
Allianz Global Investors is leading the investment in the new vehicle, which holds assets from Blackstone Capital Opportunities Fund IV, a fund that completed its fundraising in 2022, people familiar with the transaction told Bloomberg.
StepStone Group is also participating as a buyer, with Evercore advising Blackstone on the process.
The original fund posted an 11% net internal rate of return as of June 30. Other Blackstone funds also retain exposure to some of the same loans, Bloomberg noted.
Private Credit Secondaries Gain Momentum
The private-credit secondaries market has been expanding quickly, as a growing subset of investors are utilizing the secondary market to address a broad range of liquidity and portfolio management needs, according to a report from Ares Management.
In 2024, the credit secondaries transaction volume totaled $15 billion. That’s a fivefold increase from 2019. Ares credits greater awareness and education about the asset class, paired with increased dedicated capital formation, for driving more sellers to transact.
“Looking ahead, we anticipate the market to continue to grow meaningfully, with advisors projecting transacted volumes of $28 billion by 2026 and in excess of $50 billion by 2030.”
Secondaries Dealmaking Activity
In August, Bloomberg reported that Jefferies Credit Partners was looking to raise $1.16 billion for a new fund focused on private credit investments in the secondary market.
Pantheon, a secondaries specialist, recently backed a new vehicle that absorbed an existing loan portfolio from Goldman Sachs, while Ares Management (NYSE:ARES) is moving to sell €3 billion ($3.4 billion) of bundled interests in a flagship European direct-lending fund, potentially making it one of the largest private credit sales on record.
In June, GIC Pte tapped investment banking firm Evercore Inc. to advise on a potential divestment of private credit fund assets. Singapore’s sovereign wealth fund has been allocating to private credit for years and is now considering selling a portion of those positions as they mature.
Other recent GP-led secondaries deals include Pantheon Ventures, which led a $3.2 billion private credit continuation vehicle for Crescent Capital.
Last year, Benefit Street Partners closed its $2.3 billion private credit continuation vehicle, led by Coller Capital.
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