Blackstone's $870 Million Loan Acquisition: A Strategic Move in the Evolving Private Credit Landscape

According to a report by Bloomberg, Blackstone Inc. has agreed to acquire approximately $870 million of commercial real estate loans from a unit of First Internet Bancorp, an online bankBlackstone to Buy About $870 Million of Loans From Online Bank^[1]. This transaction, set to close on September 18, involves Blackstone Real Estate Debt Strategies purchasing single-tenant lease financing loans at around 95% of their unpaid balance. The deal aligns with Blackstone's broader strategy of acquiring commercial property loans, such as its prior $2 billion acquisition from Atlantic Union BankBlackstone to Buy About $870 Million of Loans From Online Bank^[1]. For First Internet Bancorp, the move supports its strategic goals of reducing exposure to lower-coupon loans and shifting deposit balances off its balance sheet to strengthen its financial positionBlackstone to Buy About $870 Million of Loans From Online Bank^[1].

This acquisition underscores the growing role of non-bank financial intermediation in the U.S. credit markets. Data from the McKinsey Global Private Markets Report 2025 indicates that private credit assets under management (AUM) reached $2.5 trillion globally by 2025, with the U.S. market alone surpassing the size of leveraged loans and high-yield bondsGlobal Private Markets Report 2025^[2]. The expansion of private credit has been driven by a confluence of factors, including lower policy rates, stricter banking regulations, and inefficiencies in traditional banking systems. These dynamics have created fertile ground for private credit to thrive, particularly as institutional investors—such as pension funds and insurance companies—seek higher returns and diversificationGlobal Private Markets Report 2025^[2].

A critical driver of this trend is the narrowing cost of capital gap between banks and private credit vehicles. As noted by the Bank for International Settlements (BIS), the cost of equity for business development companies (BDCs) has fallen relative to banks, while their leverage has increased, enabling them to compete more effectively in funding marketsThe global drivers of private credit^[3]. This shift has allowed private credit providers to offer tailored lending solutions to small and mid-sized businesses, a segment often underserved by traditional banks. Blackstone's acquisition of First Internet Bancorp's loans exemplifies this trend, as it targets niche markets where non-bank intermediaries can deploy capital more efficientlyBlackstone to Buy About $870 Million of Loans From Online Bank^[1].

The 2025 Global Investor Survey further highlights the resilience of private credit as a top-performing asset class, with AUM surging to $1.6 trillion2025 Global Investor Survey: Navigating Private Markets^[4]. Investors are increasingly allocating capital to private credit due to its ability to generate stable returns in uncertain economic environments. However, the industry faces challenges, including macroeconomic headwinds such as trade tensions, inflation, and divergent monetary policies across regions2025 Global Investor Survey: Navigating Private Markets^[4]. Despite these risks, the sector's long-term prospects remain optimistic, as liquidity constraints and shifting capital flows drive demand for defensive, income-generating strategies2025 Global Investor Survey: Navigating Private Markets^[4].

Blackstone's latest acquisition is a microcosm of the broader transformation in financial intermediation. By leveraging its scale and expertise, the firm is not only capitalizing on the structural weaknesses of traditional banks but also reshaping the credit landscape to better serve borrowers and investors. As non-bank intermediation continues to gain traction, the private credit market is poised to play an even more pivotal role in global capital allocation—a trend that will likely accelerate in the coming years.