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Blackstone European Private Credit Fund (ECRED)

Pioneering access to European Private Credit for eligible individual investors

as of December 31, 2023

€26.52

net asset value per share

100%

floating rate1

€0.1900

distribution per share

Highlights from ECRED’s First Year

Since launching in October 2022, ECRED has delivered strong performance with limited volatility for investors, driven by rising interest income with a defensively positioned portfolio.

Our focus on senior secured private loans with attractive, floating rate coupons and upfront fees has driven ECRED’s earnings and distribution power. Watch the video for more information on performance.

Past performance does not predict future returns, and there can be no assurance that ECRED will achieve its objective or avoid significant losses.

Fund Overview


Income Focused

Targets the higher income potential from floating rate private credit


Established Platform

Origination and diligence expertise developed over 17 years investing in Europe


Defensive Positioning

Senior secured loans with structural protections to provide downside mitigation


Simplified Access

Monthly subscriptions and liquidity2, expected monthly distributions

Capital is at risk and investors may not get back the amount originally invested. There can be no assurance that ECRED or any Blackstone product will achieve their objectives or avoid significant losses. Distributions are not guaranteed.

We Believe ECRED is Well-Positioned in the Current Environment

With a brand-new high quality portfolio, strong defensive features and a thematic investment approach, ECRED is in a position of strength to generate income in a challenging market environment.

100%

floating rate1

~100%

senior secured1

38%

average closing loan-to-value3

RISING RATES

ECRED can benefit from rising rates

With a 100% floating rate portfolio1, rising rates, alongside widening spreads and higher deal fees, may drive yield expectations higher.

Growth of private credit

Private Credit is Gaining Market Share as Banks Face Continued Headwinds

Private credit has become increasingly vital as secular constraints on European banks have left a financing gap. Recent market volatility has seen public loan and bond issuance further disrupted. We believe ECRED is well positioned to fill this gap.

THEMATIC investment approach

Active and Thematic Investment Approach

Focus on lending to high quality, performing companies that we believe can withstand inflation and a slowing economy. We leverage the broader Blackstone platform’s deep insights and wide reaching origination and diligence capabilities so we can make better investment decisions.

RISING RATES

ECRED can benefit from rising rates

With a 100% floating rate portfolio1, rising rates, alongside widening spreads and higher deal fees, may drive yield expectations higher.

Deal-level Yields in 1H 2022 vs. 2023

This chart is not intended in any way to represent the reward profile of ECRED and is being included for the purposes of showing an indication of yield premium of private credit more generally. Past performance does not predict future returns and there can be no assurance that any proposed Blackstone Credit & Insurance fund or strategy will be able to achieve comparable results to those of any of Blackstone Credit & Insurance’s prior funds or strategies, implement its investment strategy, achieve its investment objectives or avoid significant losses. Actual asset level returns for ECRED may vary substantially from the illustrations described above.

For illustrative purposes only. The above reflects Blackstone Credit & Insurance’s views and beliefs unless otherwise indicated as of the date appearing in this material. The above is not intended to be indicative of future results to be achieved by the proposed fund; actual results may differ materially from the information generated through the use of illustrative components of return. Base Rate/Floor reflects historical and forward rates for 3M EURIBOR as of December 31, 2023. 1H 2022 reflects 0% floor given 3-year 3M EURIBOR swap rate was negative during the first half of 2022. Period selected to show deal yields environment prior to central bank interest rates increases and broader macroeconomic uncertainty and capital markets volatility, which resulted in wider credit spreads. 2023 reflects 3-year 3M EURIBOR swap rate as of December 31, 2023 to illustrate average base rate over the next 3 years. Deal fees are amortized over an average hold of 3 years. Spread and deal fees are based on general market observations and deals in the Blackstone Credit & Insurance pipeline.

Growth of private credit

Private Credit is Gaining Market Share as Banks Face Continued Headwinds

Private credit has become increasingly vital as secular constraints on European banks have left a financing gap. Recent market volatility has seen public loan and bond issuance further disrupted. We believe ECRED is well positioned to fill this gap.

Slowdown in Public Markets
European Leveraged Loans and High Yield Issuance

There can be no assurance that this trend in the retreat of bank lending will continue or that ECRED will achieve its objectives or avoid significant losses.

Note: Unless otherwise noted, the above reflects Blackstone’s views and beliefs. Source: S&P LCD Leveraged Loans as of September 30, 2023. Loans and High Yield issuance measured as the cumulative issued volume (in € billion) of European leveraged loans and high yield bonds between July 1, 2021 and September 30, 2023.

THEMATIC investment approach

Active and Thematic Investment Approach

Focus on lending to high quality, performing companies that we believe can withstand inflation and a slowing economy. We leverage the broader Blackstone platform’s deep insights and wide reaching origination and diligence capabilities so we can make better investment decisions.

Top 5 Sectors
Highly focused on “good neighborhoods”

There can be no assurance that ECRED investments will possess all of these attributes, implement its investment strategy, or avoid significant losses. Diversification does not ensure a profit or protect against losses. There can be no assurance that views and opinions expressed herein will come to pass.

As of December 31, 2023. Reflects Blackstone Credit & Insurance’s views and beliefs. Reflects percentages based on market value. Please refer to the “Important Disclosure Information” below for important information. Blackstone Credit & Insurance is under no obligation to update this material. Reflects percentages based on market value.

Blackstone Credit & Insurance Recognized by Industry Awards4


Learn more about ECRED


Summary of Key Risk Factors

Capitalised terms herein not defined in this document have the meaning ascribed to them in the latest visa stamped version of the prospectus of ECRED Feeder SICAV.

We have classified this product as 3 out of 7, which is a medium low risk class. This rates the potential losses from future performance at a medium low level, and poor market conditions could impact our capacity to pay you.

There is no specific recommended holding period for the product. The actual risk can vary significantly and you may get back less. You may not be able to sell your Shares in ECRED Feeder SICAV easily or you may have to sell them at a price that significantly impacts on how much you get back. The summary risk indicator is a guide to the level of risk of this product compared to other products. It shows how likely it is that the product will lose money because of movements in the markets or because we are not able to pay you.

The attention of potential investors is drawn to the risks to which any investor is exposed by investing in ECRED. Potential investors should pay particular attention to the risks described in the dedicated section of ECRED Prospectus / Offering Memorandum. In making an investment decision, investors must rely on their own examination of ECRED Feeder SICAV and the terms of the offering, including the merits and risks involved. Potential investors should not construe the contents of this Prospectus as legal, tax, investment or accounting advice.

The following is a summary description of the principal risks of investing in ECRED Feeder SICAV The order of the below risk factors does not indicate the significance of any particular risk factor. The comprehensive list of risks to which ECRED Feeder SICAV is subject to is available in the Prospectus.

For the purpose of the below, references to “ECRED” are references to ECRED Feeder SICAV and its sub-funds, ECRED Master FCP, the ECRED Aggregator and the Parallel Entities (if any) (each as defined in the Prospectus).

Risk of Capital Loss and No Assurance of Investment Return. ECRED offers no capital protection guarantee. This investment involves a significant risk of capital loss and should only be made if an investor can afford the loss of its entire investment. There are no guarantees or assurances regarding the achievement of investment objectives or performance. There may be little or no near-term cash flow available to the Shareholders from ECRED Feeder SICAV, and there can be no assurance that ECRED Feeder SICAV will make any distribution to the Shareholders. This product does not include any protection from future market performance so you could lose some or all of your investment. If we are not able to pay you what is owed, you could lose some or all of your investment. A fund’s performance may be volatile. An investment should only be considered by sophisticated investors who can afford to lose all or a substantial amount of their investment. A fund’s fees and expenses may offset or exceed its profits. In considering any investment performance information contained in the document and related materials (“the Materials”), recipients should bear in mind that past performance does not predict future returns. Investors should draw no conclusions from the performance of any other investments of Blackstone Credit & Insurance or Blackstone and should not expect to achieve similar results.

Lack of Liquidity. There is no current public trading market for the Shares, and the Sponsor does not expect that such a market will ever develop. Therefore, redemption of Shares by ECRED Feeder SICAV will likely be the only way for you to dispose of your Shares. ECRED Feeder SICAV expects to redeem Shares at a price equal to the applicable NAV as of the Redemption Date and not based on the price at which you initially purchased your Shares. Subject to limited exceptions, Shares redeemed within one year of the date of issuance will be redeemed at 98% of the applicable NAV as of the Redemption Date. As a result, you may receive less than the price you paid for your Shares when you sell them to ECRED Feeder SICAV pursuant to ECRED Feeder SICAV’s redemption program.

The aggregate NAV of total redemptions (on an aggregate basis (without duplication) across ECRED, but excluding any Early Redemption Deduction applicable to the redeemed Shares) is generally limited to 2% of aggregate NAV per calendar month of all Parallel Entities and the ECRED Aggregator (measured using the aggregate NAV as of the end of the immediately preceding month) and 5% of such aggregate NAV per calendar quarter (measured using the average of such aggregate NAV as of the end of the immediately preceding three months), except in the event of exceptional circumstances described below.

In exceptional circumstances and not on a systematic basis, ECRED Feeder SICAV may make exceptions to, modify or suspend, in whole or in part, the redemption program if in the Investment Manager’s reasonable judgment it deems such action to be in ECRED’s best interest and the best interest of ECRED’s investors, such as when redemptions of Shares would place an undue burden on ECRED’s liquidity, adversely affect ECRED’s operations, risk having an adverse impact on ECRED that would outweigh the benefit of redemptions of Shares or as a result of legal or regulatory changes. Material modifications, including any amendment to the 2% monthly or 5% quarterly limitations on redemptions and suspensions of the redemption program will be promptly disclosed to Shareholders on ECRED’s website. If the redemption program is suspended, the Investment Manager will be required to evaluate on a monthly basis whether the continued suspension of the redemption program is in ECRED’s best interest and the best interest of ECRED’s investors.

The vast majority of ECRED’s assets are expected to consist of Investments that cannot generally be readily liquidated without impacting ECRED’s ability to realize full value upon their disposition. Therefore, ECRED may not always have a sufficient amount of cash to immediately satisfy Redemption Requests. As a result, your ability to have your Shares redeemed by ECRED may be limited and at times you may not be able to liquidate your investment.

Conflicts of Interest. ECRED Feeder SICAV is subject to certain conflicts of interest arising out of ECRED’s relationship with Blackstone, including the Sponsor and its affiliates. Members of the Board of Directors are also executives of Blackstone and/or one or more of its affiliates. There is no guarantee that the policies and procedures adopted by ECRED Feeder SICAV, the terms of its Articles of Incorporation, the terms and conditions of the Investment Management Agreement, that the policies and procedures adopted by the Board of Directors, the Sponsor, the AIFM, Blackstone and their affiliates, will enable ECRED Feeder SICAV to identify, adequately address or mitigate these conflicts of interest, or that the Sponsor will identify or resolve all conflicts of interest in a manner that is favorable to ECRED Feeder SICAV.

Exchange Currency Risks. A portion of ECRED Feeder SICAV’s assets may be denominated in a currency that differs from the functional currency of ECRED Feeder SICAV or an investor’s functional currency. Consequently, the return realized on any investment by such investor may be adversely affected by movements in currency exchange rates over the holding period of such investment and the life of ECRED Feeder SICAV generally, costs of conversion and exchange control regulations in such jurisdiction, in addition to the performance of the investment itself. Shareholders holding shares with a functional currency other than Euro acknowledge that they are exposed to fluctuations of the Euro foreign exchange rate and/or hedging costs, which may lead to variations on the amount to be distributed. This risk is not considered in the indicator shown above. Fund charges will be incurred in multiple currencies, meaning that payments may increase or decrease as a result of currency exchange fluctuations.

Highly Competitive Market for Investment Opportunities. The activity of identifying, completing and realizing attractive investments is highly competitive, and involves a high degree of uncertainty. There can be no assurance that ECRED Feeder SICAV will be able to locate, consummate and exit investments that satisfy its objectives or realize upon their values or that ECRED Feeder SICAV will be able to fully invest its Shareholders’ investment. There is no guarantee that investment opportunities will be allocated to ECRED Feeder SICAV and or that the activities of Blackstone’s other funds having similar or overlapping investment objectives will not adversely affect the interests of ECRED Feeder SICAV.

Other Blackstone and Blackstone Credit & Insurance Clients; Allocation of Investment Opportunities. Certain inherent conflicts of interest arise from the fact that the Sponsor, Blackstone Credit & Insurance and Blackstone provide investment management, advisory and sub-advisory services to ECRED Feeder SICAV and Other Clients. Blackstone Credit & Insurance and/or Blackstone may give advice to, and recommend securities for, Other Clients that may differ from advice given to, or securities recommended or bought for, ECRED Feeder SICAV, even though their investment objectives may be the same as or similar to those of ECRED Feeder SICAV. While Blackstone Credit & Insurance will seek to manage potential conflicts of interest in a fair and equitable manner, the portfolio strategies employed by Blackstone Credit & Insurance and Blackstone in managing their respective Other Clients are likely to conflict from time to time with the transactions and strategies employed by the Sponsor in managing ECRED Feeder SICAV and may affect the prices and availability of the securities and instruments in which ECRED Feeder SICAV invests.

Recent Market Events Risk. Local, regional, or global events such as war (e.g., Russia/Ukraine), acts of terrorism, public health issues like pandemics or epidemics (e.g., COVID-19), recession, or other economic, political and global macro factors and events could lead to a substantial economic downturn or recession in the U.S. and global economies and have a significant impact on ECRED and its investments. The recovery from such downturns is uncertain and may last for an extended period of time or result in significant volatility, and many of the risks discussed herein associated with an investment in ECRED may be increased.

Reliance on Key Management Personnel. The success of ECRED will depend, in large part, upon the skill and expertise of certain Blackstone professionals. In the event of the death, disability or departure of any key Blackstone professionals, the business and the performance of ECRED may be therefore adversely affected. Some Blackstone professionals may have other responsibilities, including senior management responsibilities, throughout Blackstone and, therefore, conflicts are expected to arise in the allocation of such personnel’s time (including as a result of such personnel deriving financial benefit from these other activities, including fees and performance-based compensation).

Sustainability Risks. ECRED may be exposed to an environmental, social or governance event or condition that, if it occurs, could have a material adverse effect, actual or potential, on the value of the investments made by ECRED. Sustainability risks are assessed into investment decisions relating to ECRED.

Target Allocations. There can be no assurance that ECRED will achieve its objectives or avoid substantial losses. Allocation strategies and targets depend on a variety of factors, including prevailing market conditions and investment availability. There is no guarantee that such strategies and targets will be achieved and any particular investment may not meet the target criteria.

Use of Leverage. ECRED intends to borrow money. If returns on such investment exceed the costs of borrowing, investor returns will be enhanced. However, if returns do not exceed the costs of borrowing, Fund performance will be depressed. This includes the potential for ECRED to suffer greater losses than it otherwise would have. The effect of leverage is that any losses will be magnified. The use of leverage involves a high degree of financial risk and will increase ECRED’s exposure to adverse economic factors such as rising interest rates, downturns in the economy or deteriorations in the condition of the Investments.

This leverage may also subject ECRED and its Investments to restrictive financial and operating covenants, which may limit flexibility in responding to changing business and economic conditions. For example, leveraged entities may be subject to restrictions on making interest payments and other distributions.

Valuations Matters. The valuation methodologies used to value any investment in which ECRED Feeder SICAV invests will involve subjective judgments and projections and may not be accurate. Valuation methodologies are based on assumptions and opinions about future events, which may or may not turn out to be correct. Valuation methodologies may permit reliance on a prior period valuation of particular Investments. Ultimate realization of the value of an asset depends to a great extent on economic, market and other conditions beyond Blackstone Credit & Insurance’s control. Accordingly, there is no guarantee that the fair value as determined by the AIFM (with the assistance of Blackstone Credit & Insurance) at any given point in time will represent the value that will be realized by ECRED Feeder SICAV on the eventual disposition of the Investment or that would, in fact, be realized upon an immediate disposition of the Investment.

  1. As a percentage of debt investments in ECRED’s portfolio, which represents 99.9% of ECRED’s investments.
  2. Monthly liquidity subject to a notice period of 30 days. Redemptions expected to be settled within 60 calendar days following the effective redemption date.
  3. Reflects average closing loan-to-value of private credit investments only and weighted by funded market value. Calculated as net debt through respective Blackstone Credit & Insurance loan tranche divided by estimated enterprise value of the portfolio company, at closing of the investment.
  4. Private Debt Awards. The awards described may not be representative of any one client’s experience with Blackstone Credit & Insurance and should not be viewed as indicative of future performance. The awards were provided by Private Debt Investor, a publication addressing private credit markets, and cover the 2022 calendar year. Private Debt Investor determines its industry awards annually by way of nominations and an online reader poll that prompts readers to vote for a particular firm in one or more of multiple enumerated categories, including those shown above and therefore is based on subjective criteria. In addition, their selection to receive the awards and/or their rankings may have been based on a limited universe of participants, and therefore there can be no assurance that a different sampling of participants might not achieve different results. Private Equity International Award. The award described may not be representative of any one client’s experience with Blackstone Credit & Insurance and should not be viewed as indicative of future performance. The award was provided by Private Equity International, a publication addressing private equity markets, and covers the 2022 calendar year. Private Equity International determines its industry awards annually by way of nominations and an online reader poll that prompts readers to vote for a particular firm in one or more of multiple enumerated categories, including those shown above and therefore is based on subjective criteria. In addition, their selection to receive the awards and/or their rankings may have been based on a limited universe of participants, and therefore there can be no assurance that a different sampling of participants might not achieve different results.