Blackstone president Jon Gray on Tuesday defended the quality of loans within the firm’s flagship private credit fund after investors pulled nearly 8% from it in the last quarter.

The alternative asset management giant said in a late Monday filing that it allowed investors to withdraw 7.9% of BCRED, which it calls the largest private credit fund in the world, with about $82 billion invested. Blackstone did so in part by allowing the firm’s own investors to plow $150 million into the fund.

The move sparked a sell-off in Blackstone shares, which fell as much as about 8.5% in morning trading Tuesday, as well as in other private credit peers.

“When you think about credit quality, the 400-plus borrowers here, they had 10% EBITDA growth last year,” Gray told CNBC’s David Faber, using a term referring to a company’s financial performance. “So when we look at this, we feel pretty darn good.”

Instead of calming markets, recent moves by alternative asset managers to allow investors to cash out of funds have only added to jitters around private credit and loans to the software industry. Last month, the storm intensified when Blue Owl said it found buyers for $1.4 billion of its loans, in part to help cash out 30% of an embattled credit fund.

Now, with the far larger asset manager Blackstone being swept up in it, concerns around private credit seem to be broadening.

A Blackstone spokesman said the firm and its employees’ investment in BCRED was “about meeting 100% of requests for the quarter with certainty and timeliness.”

The fund delivered 9.8% annualized returns since inception for Class I shares, the spokesman said.

“We’ve had a ton of noise,” Gray told CNBC. “As you guys know better than anybody in the press, this has become a story.”

Concerns were first triggered last fall with the collapse of Tricolor and First Brands, firms that also received funding from banks, the Blackstone executive noted.

“There’s a constant spin cycle, and so when that’s happening, it’s not a surprise that investors can get nervous,” Gray said. “Financial advisors can say, ‘Hey, I want to redeem.'”

Still, loans to software firms make up the single biggest exposure for BCRED, at roughly 25% of the fund, per disclosures.

While Gray acknowledged that “there are software companies that will be disrupted” by AI in the coming years, he also noted that debt lenders are senior to equity holders and that many software companies will be difficult to dislodge.

“There’s this disjointed environment now between what’s happening on the ground with underlying portfolios and what’s happening in the news cycle,” Gray said. “Ultimately, these things will resolve themselves.”