Jon Gray, President and COO of Blackstone, speaks during the Axios BFD event in New York City, U.S., October 12, 2023. REUTERS/Brendan McDermid

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.