Blackstone’s giant BDC sees negative returns in February

For the first time since September 2022, the Blackstone Private Credit Fund posted a monthly loss and in February reported a monthly total negative return of for its I shares of 0.4%, according to the fund’s website.

In September 2022, Blackstone Private Credit Fund, also known as BCRED, posted a negative return of 1.3%, according to the website. The giant private credit fund has $82.7 billion in assets.

BCRED is a nontraded business development company, meaning its shares are not listed on an exchange and resulting in limited liquidity for investors.

The fund’s estimated net asset value per share in February was $24.38, according to the company’s website, compared to $24.79 at the end of last year, a decline of 1.7%.

“BCRED continues to deliver strong performance for its investors, with a 9.5% annualized total return since inception for Class I shares, a 360 basis points premium to leveraged loans,” a Blackstone spokesperson wrote in an email “BCRED has outperformed the leveraged loan market by 100 basis points year to date.”

Meanwhile, the Morningstar ​LSTA index of publicly traded leveraged loans fell 0.8% in February, according to reporting by Reuters.

Financial advisors’ sales of nontraded BDCs, which invest in private credit, have tanked in the past couple of months as the private loan market faces questions about lending to software companies and high-profile bankruptcies in 2025. 

BCRED’s negative performance last month comes at a time when the broad market is watching such private credit funds and vehicles with acute interest because of fears around the performance of private loans.

The fund at the start of the month said it saw in the first quarter of 2026 a surge in clients looking to sell their shares back to the nontraded BDC.  

In a filing with the Securities and Exchange Commission, BCRED said clients had redeemed close to $3.7 billion in the fund’s shares during the first two months of the year.

That represents 7% of the fund's shares being sold back, above the typical maximum of 5% the fund allows. Other BDCs and private loan funds have seen a spike in clients seeking to sell their shares back to the company.

Traded and nontraded BDCs are funds that act like mini-banks and finance the loans of mid-sized private companies. They have exploded in popularity since the 2008 credit crisis, with the restriction placed on banks opening up the market.

But investors have woken up to worries about BDCs' exposure to loans to private software companies, which are under pressure because of the potential for artificial intelligence to wipe them off the map.

And recent high-profile bankruptcies have also spooked financial advisors’ clients, resulting in a surge in clients cashing out of nontraded BDCs by selling back billions of dollars of shares to the investment funds in the final months of last year.