Blackstone's credit and insurance unit could hit speed bump on rates

Blackstone executives are looking to 2025 as a lower cost of capital from declining interest rates to touch off a real estate recovery, more realizations, easier fundraising, higher secondary market returns but potentially lower absolute returns in private credit. With the cost of capital moving lower, Blackstone executives expect a new commercial real estate investment cycle of increasing values and improving investor sentiment toward the sector, Schwarzman said.There's been an increased interest in the sector from Blackstone's investors, with redemptions down in September about 90% from their January 2023 peak, he said. Blackstone reported $1.1 trillion in assets under management as of Sept. 30, a 3% increase from three months earlier and up 10% from a year earlier. Blackstone's noninvestment-grade private credit strategies could still generate excess returns relative for clients relative to liquid markets even with lower interest rates, he said.