Cox Capital prices the semi-liquid exit at 12.5% and 17.5% off NAV

Shareholders stuck behind the repurchase caps at Blackstone Private Credit Fund and the HPS Corporate Lending Fund now have a price to sell into: Cox Capital Retail Secondaries Fund I LP, run by an affiliate of Conshohocken, Pa.-based Cox Capital Partners, is offering $20.65 a share for BCRED's Class I stock and $20.17 for HLEND's, against reported Class I net asset values of $23.60 and $24.45—discounts of 12.5% and 17.5%, set out in a Sept. 23 statement and open until 5 p.m. ET on Nov. 3.

The commitment is small and precisely drawn: Cox will buy up to $20 million of Class I shares in each nontraded BDC, $40 million in total, and has reserved the right to accept as much as an additional 2% of each fund's outstanding Class I shares without pushing the deadline. The firm says it is unaffiliated with the two funds and their advisers and that neither fund has endorsed the offers; John Cox, its chief executive and chief investment officer, framed the trade as access, saying retail shareholders deserve the kinds of secondary liquidity options for private-market exposure that institutions have had for years.

The queues are why the trade exists. BCRED took about $4.3 billion of repurchase requests in the third quarter, roughly 10% of shares outstanding, and held payouts to its 5% cap, according to AltsWire's earlier reporting; requests had run near 10% in the second quarter under the same cap, after the board lifted the limit to 7% in the first quarter to meet a record 7.9%. HLEND shareholders asked out of about 11.5% of shares in the third quarter, prorating for a second straight quarter with about $600 million repurchased, roughly 43% of what was tendered. Second-quarter requests at HLEND reached about 13.3% of shares, and the fund accepted 25.1 million of 66.7 million shares tendered—about 38%—for $612.1 million. Cox cited both third-quarter request levels in announcing its offers.

The offer prices put a hard number on a squishy promise: a BCRED holder selling to Cox gives up about $2.95 a share to leave the queue; an HLEND holder gives up about $4.28. Against a single quarter's $4.3 billion of BCRED requests, the $40 million Cox has committed in total is under 1 percent—enough to establish a price, nowhere near enough to clear a queue. The semi-liquid market has spent two years arguing about what a capped repurchase costs the investor; as of Sept. 23 the argument has a quote.

The five-point gap between the two discounts says more than either number alone: HLEND reported $12.26 billion in aggregate NAV, roughly a quarter the size of BCRED's $43.2 billion, which leaves a thinner secondary bid for its shares, and it has now prorated twice running. Smaller-fund demand coupled with a longer unresolved queue most likely explains part of the spread, though $40 million of buying power is not price discovery in any rigorous sense. Both discounts are struck against reported NAVs that no sale has tested this cycle, which makes 12.5% a reading on the gate rather than a verdict on the loan book.

Cox has been assembling this trade for months. Our August reporting found the firm, already buying nontraded BDC shares below NAV, preparing formal offers to give interval fund investors a second route to liquidity; that plan pointed at interval funds, but the new offers run at the largest end of the nontraded BDC market, where the queues have grown longest. They land in a complex that has been selling liquid assets and borrowing privately rather than widening repurchase caps, and where the year's flows have watched capital rotate from BDC exits into hard assets. September reporting on HLEND made the point the discounts now underline: the cap, more than the credit, decides who gets paid.

The 5% cap is a fixed price of admission, and the sponsors that hold the wealth channel are the ones whose balance sheets can keep a queue from becoming an exit. Cox's offer cuts against the second half of that position: a sponsor does not need debt capacity to keep the cap defensible when a third party will stand 12.5% off NAV in public; it needs a discount shallow enough to quote, and a published bid for gated shares likely reduces the pressure it feels to widen the limit. The funds whose discounts stay shallow keep the wealth channel's confidence, and the ones whose discounts widen have a public number working against every wholesaler's pitch.

The offers close Nov. 3, ahead of the fourth-quarter repurchase tables, and the next price Cox publishes will show whether the queues are clearing or the cap is doing more work than it was built for.