Investors Keep Putting Money Into Private Credit

livemint.com:

Big banks are worried that more lending might migrate away from them in the coming years. Investors big and small are taking notice. The boom in alternative assets has been a big winner for managers of those funds in recent years, as things such as bespoke corporate lending take share from what has traditionally been the business of banks.

However, one recent wrinkle has been a worry that the people supplying money to those funds might not keep pouring in cash as interest rates rise—especially when it comes to wealthy individuals, one of the major sources of growth. Yet there are indicators the spigot isn’t closing. A jump in redemption requests late last year for the Blackstone Real Estate Income Trust is what initially spooked investors.

But Breit has lately reported diminishing redemption requests: August requests of just under $3 billion were the lowest since last October, more than 40% below the January peak and the fourth straight month of slowing requests. Even if certain funds—including more traditional private-equity buyout funds facing a tough deal-making environment—might not be seeing strong inflows, funds in other assets are making up for some of that. The Blackstone Private Credit Fund said inflows into the nontraded vehicle were $2.4 billion in the third quarter reported so far, up 30% from the prior quarter.

Blue Owl Capital reported figures for two nontraded private credit funds, Blue Owl Credit Income Corp. and Blue Owl Technology Income Corp., that point toward a net $1 billion-plus inflow for the third quarter, better than the pace of the second quarter, according to estimates by Autonomous Research analyst Patrick Davitt. Even within real estate, despite concerns about office and other property