Blackstone Group’s flagship private credit fund suffered its first monthly loss in more than three years, a clear sign of the weakening performance in the $1.8 trillion market.
According to its official website, the $83 billion BCRED fund declined by 0.4% in February, marking its first monthly drop since September 2022. The website also shows that after achieving an 8% increase in 2025, the fund’s performance was flat in the first two months of this year.
According to a message sent to financial advisors and seen by Bloomberg, Blackstone Group told investors that its February losses reflected the widening gap between public and private market valuations, as well as the unrealized value of individual stocks including Medallia.
According to a previous report by the Financial Times, Blackstone Group stated in a release that the fund outperformed the leveraged loan market by approximately 0.4 percentage points in February and by about 1 percentage point since the beginning of the year. Blackstone said this highlights the advantage of private credit during periods of market volatility.
“BCRED has consistently delivered strong performance for investors. Since its establishment in January 2021, the annualized total return rate of Class I shares has reached 9.5%,” a company spokesperson said in an email statement.
BCRED is one of many private credit vehicles that have recently faced an increase in redemptions, due to concerns over valuations and underwriting standards in the credit market, as well as the potential for artificial intelligence to disrupt the software business.
Blackstone Group disclosed in February that it had written down the value of its loan to software company Medallia Inc. (owned by Thoma Bravo) to 78% of its face value. This loan has become a weak link for private credit institutions, exposing the huge valuation differences among different managers.
This alternative asset management company also took an unusual step, using its own cash and donations from senior leaders to meet the redemption requests of BCRED, which exceeded the 5% limit of the fund’s net assets previously set.
