BLK, BX, APO: Retail Investors’ Fund Exit Roils $3.5T Private Credit Market — What’s Next?

Wealthy and retail investors are pulling out en masse from publicly traded private credit funds, rattling a broader global market estimated to be about $3.5 trillion under management as of late 2025.

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However, banking giant Goldman Sachs GS +0.51% ▲ sees the trend as only creating short-term pressure on the management fees and fee-related earnings. This comes even though these vehicles have emerged in recent years as a key growth driver for alternative asset managers such as Blackstone BX +2.82% ▲ , Ares Management ARES +1.87% ▲ , and Blue Owl Capital OWL -0.83% ▼ .

Why Are Retail Investors Dumping BDCs?

These funds, formally structured as business development companies (BDCs), power lending to private firms outside the traditional banking system. However, these investment vehicles have come under pressure recently due to factors such as discount trading on the funds, loan-value writedowns by firms such as BlackRock BLK -0.45% ▼ , and a series of high-profile dividend cuts at select BDCs in recent weeks.

Other factors include the lowering of interest rates by the U.S. Federal Reserve and concerns about credit quality following the recent collapse of auto parts maker First Brands and subprime auto lender Tricolor.

Blackstone Execs Join Forces to Halt Rout

On Tuesday, Blackstone BX +2.82% ▲ fell as much as 7% after regulatory filings showed the alternative asset manager let investors withdraw a record $3.7 billion this year from its flagship BCRED private credit fund, a far larger‑than‑usual redemption wave after the firm lifted its permissible withdrawal cap to 7%. Reports indicate that over 25 senior executives at the New York-based company have scrambled to raise $150 million to help the company weather the storm.

Analysts have argued that Blue Owl Capital’s OWL -0.83% ▼ decision earlier this month to abandon its quarterly withdrawal interval for periodic distribution on its flagship private retail debt fund could sour investors’ taste for BDCs. This is even as recent research by financial advisory firm RA Stanger found that inflows into non-traded BDCs tumbled by 40% month-over-month to $3.2 billion in January.

How Things Could Play Out

Goldman Sachs sees net flows into Blackstone’s retail private credit vehicles likely shrinking further into the second quarter due to lower prospective returns and significant negative media coverage. The banking giant also sees the current sentiment as likely to affect Blue Owl Capital’s non-traded BDCs since they date from roughly the same period.

In terms of impact on earnings, Goldman Sachs expects more impact on Blue Owl and Blackstone than on Ares Management ARES +1.87% ▲ and Apollo Global APO +0.56% ▲ .

Which Is the Best Asset Manager Stock to Buy?

Of all the investment firms featured in this article, Blue Owl currently boasts the biggest upside of about 69% at an average price target of $17.31, the TipRanks Stock Comparison tool shows. This is despite OWL holding a Moderate Buy consensus rating from analysts.

On the other hand, BlackRock, rated a Strong Buy, offers the least upside with its average price target of $1,354.30 implying about 29% upside.

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