On 05 May 2025, the United States Securities and Exchange Commission (US SEC) issued a notice (Investment Company Act Release No. 35567; File No. 812-15759) concerning a joint application submitted by a suite of Blackstone-affiliated funds and advisory entities. The applicants are seeking an exemptive order under Sections 17(d) and 57(i) of the United States Investment Company Act of 1940, and US SEC Rule 17d-1 thereunder, to permit joint participation in investment opportunities that would otherwise be prohibited as affiliated transactions. The application was originally filed on 14 March 2025 and subsequently amended on 11 April and 24 April 2025.
The core of the request lies in enabling certain business development companies (BDCs) and closed-end management investment companies, managed or advised by Blackstone entities, to co-invest alongside affiliated investment vehicles. This structure, while commercially aligned with market efficiencies, requires prior regulatory relief due to the conflict-of-interest provisions embedded in the Investment Company Act. Sections 17(d) and 57(a)(4) generally prohibit registered investment companies and BDCs from engaging in joint transactions with affiliates unless exemptive relief is granted by the Commission.
The proposed relief, if granted, would allow entities such as Blackstone Private Credit Fund, Blackstone Secured Lending Fund, Blackstone Private Multi-Asset Credit and Income Fund, and several others listed in the application’s appendices, to engage in co-investment transactions in portfolio companies, provided certain conditions and allocation procedures are followed. The applicants assert that such relief would enhance operational flexibility, improve capital deployment, and ultimately benefit shareholders of the funds involved.
Under Rule 17d-1, the Commission evaluates such applications to determine whether the proposed joint participation would be consistent with the protection of investors and the public interest. As is standard in such proceedings, the US SEC is now soliciting public comment from interested parties. The notice explicitly states that unless a hearing is ordered by 30 May 2025 at 5:30 PM, an order granting the requested relief may be issued without further notice.
Interested persons are invited to submit their views via email to the Commission’s Secretary at Secretarys-Office@sec.gov, with a courtesy copy served to the applicants’ legal counsel, including representatives at Blackstone Inc. and Simpson Thacher & Bartlett LLP. The submission must include a certificate of service or affidavit of delivery, and clearly outline the writer’s interest in the matter, contested issues, and rationale for a hearing request, pursuant to Rule 0-5 of the United States Investment Company Act.
This application represents a significant development in the evolving regulatory landscape governing alternative credit strategies and affiliated co-investment activity. If granted, the relief would offer a formalised pathway for BDCs and closed-end funds under the Blackstone umbrella to engage in joint allocation of investment opportunities, potentially setting a precedent for similar exemptive requests by other asset managers.
The US SEC has indicated that the full text of the amended application, including detailed representations and proposed safeguards, is available via its EDGAR system. Stakeholders and compliance officers are encouraged to review the documentation and assess implications for portfolio management, governance oversight, and fiduciary accountability.
(Source: https://www.sec.gov/files/rules/ic/2025/ic-35567.pdf)
