Blackstone has reportedly shelved, in its current form, a $3 billion collateralized fund obligation (CFO) deal intended to provide liquidity to investors in one of its older secondary funds. The transaction was designed to cash out stakeholders in funds that were, in some cases, two decades old.
The decision to halt the deal points to challenges in finding buyers. The senior debt tranche offered a 7.5% yield. The junior tranche offered a 12% yield. Reports indicate that potential investors were concerned about the deal’s high leverage and the advanced age of the underlying private equity assets. The development offers a window into market appetite for complex structured-finance products tied to aging private equity holdings.
Separately, Blackstone’s real estate income trust, BREIT, announced its regular monthly distribution for September. Blackstone also proceeded with a separate security offering with a pricing date of October 1, 2026.