Amid the private credit market crisis, Blackstone is raising $10 billion for its opportunistic credit fund, attracting more than the offered amount in subscriptions.

Blackstone Group raised $10 billion for its latest opportunistic credit fund, highlighting that institutional investors remain enthusiastic amid volatility in the private credit market. This is the largest opportunistic credit fundraising effort in Blackstone Group’s history.

Subscription for Blackstone Capital Opportunity Fund V was robust, with oversubscription achieved; the fundraising reached the maximum and the fundraising was completed. The fund will invest in both operating-style assets and opportunistic assets, with the latter primarily targeting assets that may be undervalued.

In recent months, the private credit market, which totals $1.8 trillion in size, has been under widespread scrutiny, largely because of its exposure to the software industry— the rapid development of artificial intelligence poses an existential-level threat to that industry. The decline in software companies’ stock prices has been especially unsettling for retail investors, and several private credit funds aimed at individual investors have set redemption limits at 5% of total units.

Lou Salvatore, co-portfolio manager of the Blackstone Capital Opportunity Fund, said that raising $10 billion even amid ongoing industry noise fully reflects Blackstone’s strength in credit. In the past few weeks, private equity executives have repeatedly emphasized that market volatility creates new opportunities for investors who hold cash.

In a letter to investors last month, Apollo Global Management said that complex and uncertain times often give rise to the most attractive investment opportunities, but only if investors have the flexibility to take decisive action.

Blackstone manages a total of $520 billion in assets across cross-company credit and real estate credit. Its flagship private credit product this year has faced a record number of redemption requests, forcing the firm to have some executives dip into their own pockets to meet approximately $3.8 billion in redemption demand.

Blackstone’s prior Capital Opportunity Fund completed fundraising in January 2022, reaching a final size of $8.75 billion.

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