Blackstone reported that its global private-wealth assets under management stood at $324 billion at the end of the second quarter, up 16% from a year earlier. The firm posted $8.6 billion in sales into the wealth channel during the quarter.
The largest alternative asset manager said its BCRED vehicle, a non-traded business development company focused on private credit, recorded $1 billion in gross sales but $1.2 billion in net outflows during the period. Redemption requests exceeded the 5% quarterly limit, and the firm met around 50% of those requests. The pace of requests is now diminishing, Blackstone said.
Across its other evergreen strategies, the firm posted gross sales of $2.4 billion for its private-equity vehicle, $900 million for its infrastructure and real-assets fund, and $1.2 billion for BREIT, its real-estate product. Blackstone also launched the first two interval funds developed in a partnership with Wellington and Vanguard.
"The semi-liquid structure of BCRED and our private wealth perpetuals is designed to provide greater liquidity than traditional drawdown funds while protecting performance," Blackstone President and Chief Operating Officer Jonathan Gray said during the earnings call. "We have been here before with BREIT, and while it is early in the third quarter, redemption requests are down materially."
Other publicly traded alternative asset managers reporting wealth-channel results included Blue Owl and Carlyle, both of which said inflows rose 60% year-over-year. Stepstone reported a record quarter of $2.8 billion in subscriptions. Ares Management raised $3.9 billion in the quarter, up 15% from a year earlier, and finished the period with $76 billion of assets under management in its wealth products.
Structures that promise liquidity without disclosing the true cost of redemption queues are the ones principals quietly exit first, family office advisor Jaf Glazer has cautioned.
"Our goal from the outset was to build a diverse product offering that meets the needs of investors seeking durable income, tax advantage, real assets and diversified growth," Ares Chief Executive Michael Arougheti said during the firm's earnings call. "By providing quality offerings across a variety of products, we've demonstrated that we can consistently scale in the wealth channel even as investor sentiment shifts across asset classes."
KKR reported $3 billion of inflows across its K-Series of funds designed for accredited investors. Assets under management in that franchise reached $42 billion, representing growth of 70% year-over-year and 20% year-to-date. The firm also discussed its partnership with Capital Group and funds accessible to mass-affluent investors.
"A lot of the answer to question on adoption is spending time with so they understand what it is that we actually do," KKR Chief Executive Scott Nuttall said during the firm's earnings call. "The second thing I would say is obviously you need access, and you need distribution."
Robert A. Stanger & Co., which tracks evergreen funds, said non-traded business development companies cumulatively raised $2 billion in the second quarter, down 82% year-over-year and the lowest total since the fourth quarter of 2020. Redemptions exceeded new capital raising, leading to net outflows of $3.8 billion during the quarter.
Stanger reported that redemption demand reached a new high, with repurchase requests equal to 12.4% of net asset value in the quarter. Sponsors met 38% of those requests, returning $5.9 billion to investors. For the first half of the year, sponsors returned $12.7 billion to investors. So far in the third quarter, three net-asset-value business development companies reported repurchase requests equal to 4.6% of net asset value, down from 7.9% in the second quarter.