* Partners Group reports repurchase requests at second

fund

* Three other Partners funds have withdrawal requests of

3.5% to 5%

* Blackstone caps redemptions at flagship private credit

fund

By John Revill and Arasu Kannagi Basil

June 4 (Reuters) - Swiss alternative asset manager

Partners Group on Thursday flagged more withdrawal

requests from its funds while Blackstone said it capped

withdrawals at its ​flagship private credit fund, underscoring

widening stresses in private funding markets.

Partners is expected to cap a second major investment pool,

people familiar with the matter said, a day after its shares

plunged on news it had capped a key fund.

It said repurchase requests at a $16 billion Delaware-based fund

had reached 6% of assets held, exceeding the 5% limit it allows

each quarter. This means withdrawals would be capped, two

sources familiar with the matter told Reuters.

The middle-market alternative asset manager, which oversees

about $185 billion, said it was being affected by industry-wide

volatility across open-ended evergreen funds, starting with

private credit and spilling into private equity. Investors are

focused on problems appearing in loans by private credit funds

run by big asset managers, ⁠scrutinizing valuations, lending

standards and how software companies can handle AI challenges.

In a sign of continuing pressure at private credit funds, the

world's largest alternative asset manager, Blackstone, capped

withdrawals at its ​flagship private credit fund as redemption

requests jumped in the second quarter.

Wednesday's news of Partners Group capping redemptions is

among the first signs of how stresses in private credit, which

typically issues the loans that finance private equity

investments, were spreading.

Many of the newer unlisted private credit funds, known as

business development companies, are evergreen, meaning they

offer investors windows at set intervals to withdraw funds.

"Evergreen is a difficult proposition to fulfill," said

Virinchi Narayan, managing director of Dubai-based Three Pins

Capital Limited.

"The best approach for these funds has always been and

continues to be closed-ended structures. Easy money and the

promise of expanding the investor base has provoked a

diversification into evergreen and redemption-driven structures

- because investors asked for these."

CONTAGION

Redemption windows at key U.S. non-traded private credit

funds for the second quarter began closing last Friday, with

market participants keeping a close eye on the rate of

withdrawal requests.

Cliffwater was the first to report withdrawal requests at its

flagship $31.3 billion private credit fund rose to 17% in the

second quarter from 14% in the first quarter.

Investors in the $79 billion Blackstone Private Credit Fund

(BCRED) sought to pull 10% of shares in the second-quarter

tender offer, compared with 7.9% in the previous quarter.

Unlike last quarter, when Blackstone and some employees

invested to help meet all the requested redemptions, the fund

limited withdrawals to 5%, the customary limit for these

vehicles.

"BCRED's structure is a fundamental feature, with investors

exchanging some liquidity at times for long-term

outperformance," it said in a statement.

Partners Group said on Wednesday it had limited withdrawals

from its $8.6 billion private equity fund after redemption

requests at the Luxembourg-based Partners Group Global Value

SICAV reached 9.8% of the assets held.

Three other mature evergreen funds, with a total fund size

of $9.7 billion, mainly from institutional investors, are

estimated to see redemptions between 3.5% and 5%, Partners Group

said on Thursday.

It said expected gross new client demand was $26 billion to

$32 billion for 2026, supported by "a large and visible pipeline

of fundraising opportunities across mandates, evergreens and

traditional closed-ended programmes."

The confirmation helped its shares recover somewhat after

falling 16% to a six-year low on Wednesday.

The slump in the Partners Group shares fed through to peers

in Europe on Wednesday, including Sweden's EQT, CVC

Capital Partners and Bridgepoint Group. In the

U.S., shares of asset managers Blackstone, KKR,

TPG and Ares Management also fell.

Shares rose on Thursday, with Blackstone up 7%.

(Additional reporting by Dave Graham, John O'Donnell and Isla

Binnie

Writing by Vidya Ranganathan

Editing by Rod Nickel)