Blackstone's BCRED BS

BS stands for Bullshit in case you were wondering

A recent Bloomberg article discussing Blackstone’s BCRED fund’s travails includes this defense from the company:

So yeah, redemptions were high, but a 360 bp premium to leveraged loans is pretty sweet, right?

And “leveraged loans” sounds just like what BCRED does. Right?

Wrong. In the BCRED factsheet, Blackstone defines “leveraged loans.”

In other words: these are loans from borrowers (companies) that are leveraged—that is, they have a lot of debt relative to their profits.

What Blackstone maybe forgot to tell us: BCRED, in addition to investing in leveraged loans itself borrows money, to increase the size of its portfolio. This is called fund-level leverage. Our guess is that significantly less than 100% of BCRED investors are aware.

According to Blackstone, this fund-level leverage increases BCRED’s expected return (and expected risk) relative to the unlevered portfolio to which BCRED compares itself.

It’s very clear (at least in the footnotes :))

Any investor-fiduciary that accepts Blackstone’s suggestion that “Leveraged Loans” is an appropriate benchmark isn’t doing their job right.

Or possibly at all.

And Blackstone isn’t helping.

Bloomberg Article:

https://www.bloomberg.com/news/articles/2026-03-02/blackstone-allows-investors-to-pull-record-7-9-from-bcred-fund

BCRED Fact Sheet:

https://www.bcred.com/non-us-investors/

CFA Institute on Benchmarks

https://www.gipsstandards.org/wp-content/uploads/2023/08/gs_benchmarks_firms.pdf