TLDR
- BlackRock’s $26 billion HPS Corporate Lending Fund received $1.2 billion in withdrawal requests in Q1, equal to 9.3% of net asset value
- BlackRock capped redemptions at 5%, paying out $620 million and restricting further withdrawals
- BLK stock dropped around 5% on Friday following the news
- Rival firms also sold off: Blue Owl, KKR, Carlyle, Apollo, Ares, and TPG each fell 5–6%
- Earlier this week, Blackstone raised its redemption limit from 5% to 7% and injected $400 million to meet all requests
BlackRock (BLK) hit a wall on Friday after its $26 billion HPS Corporate Lending Fund was flooded with redemption requests it couldn’t fully honour.
Investors asked to pull out 9.3% of the fund’s net asset value — roughly $1.2 billion — in the first quarter. BlackRock paid out $620 million, hitting the 5% threshold that lets it shut the door on further withdrawals for the period.
BLK stock dropped around 5% in early Friday trading. The stock had already been under pressure alongside the broader private credit sector.
The damage spread quickly across the sector. Blue Owl Capital, KKR, Carlyle Group, Apollo Global Management, Ares Management, and TPG all fell between 5% and 6% on Friday.
BlackRock framed the withdrawal cap as a planned feature, not a crisis move. The company said the limits exist to prevent a structural mismatch between investor capital and the longer-term nature of private credit loans.
“Preserving the fund’s available capital to lean into this perceived opportunity set… is in the best interest of the fund as a whole,” HPS said in a statement.
Pressure Builds Across Private Credit
BlackRock isn’t alone. Blackstone earlier this week raised its standard 5% redemption cap to 7% and put in $400 million of its own money — alongside employee capital — to meet all outstanding requests.
Blue Owl has also drawn attention after replacing client redemptions with promised future payouts rather than cash.
The wave of redemption requests reflects a growing unease with private credit as an asset class. Money in these funds is often locked up in illiquid loans that can’t be sold quickly — a mismatch that becomes painfully obvious when investors want out at the same time.
The HPS Corporate Lending Fund, known as HLEND, is a non-traded business development company (BDC). In the prior quarter, it faced redemption requests of around 4.1% — well below this quarter’s 9.3%.
Background on the HPS Deal
BlackRock acquired HPS Investment Partners in a $12 billion deal last year, making it one of the firm’s biggest bets on private credit.
The fund previously offered to repurchase up to 5% of its outstanding units last month, which is standard practice for non-traded BDCs.
Investor sentiment in the private credit space had already been rattled last year when some funds were caught with exposure to the bankruptcies of a U.S. auto parts supplier and a subprime auto lender.
Markets have been volatile in 2025, with investors pulling toward safer assets. That shift has accelerated redemption pressure across private credit vehicles that were seen as high-yield alternatives during calmer conditions.
BlackRock’s HLEND had $26 billion in assets under management at the time of the withdrawal cap announcement.
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