American firm Blackstone is reportedly set to enter the European investment space with a private credit fund aimed at wealthy investors.
Sources told Bloomberg that the fund will be based in Luxembourg. Approval was reportedly given by local regulators at the end of last week. It will reportedly be the first of its kind on the continent, even though they have been popular in the US for some time.
As the newswire wrote: “The move is a significant step in bringing the complex and illiquid world of private credit within reach of individual investors, who have previously been shut out of the market. Blackstone and other big asset managers have found success with similar funds in the US, which offer higher yields in exchange for higher risk.”
This new venture from Blackstone is set to run in perpetuity, unlike other private credit funds that are limited in their duration.
Bloomberg wrote: “For Blackstone, it means cash can be recycled into new investments as loans are repaid, promising a steady stream of fees for managers.”
It is thought that the new fund will allow Blackstone to expand the reach of its $222bn private wealth business to a set of new European investors.
Blackstone refused to comment on Bloomberg’s piece.