Key Highlights
- The HPS Corporate Lending Fund managed by BlackRock faced withdrawal requests totaling $1.2 billion during the first quarter, representing 9.3% of its net asset value
- The firm invoked its 5% redemption limit, distributing $620 million while blocking additional withdrawals
- Shares of BLK declined approximately 5% during Friday’s trading session
- Competing asset managers experienced similar selloffs: Blue Owl, KKR, Carlyle, Apollo, Ares, and TPG each lost 5–6%
- Days before, Blackstone increased its withdrawal ceiling from 5% to 7% and contributed $400 million to satisfy all redemption demands
BlackRock (BLK) faced significant market pressure Friday after its $26 billion HPS Corporate Lending Fund encountered a surge in withdrawal demands that exceeded its ability to fulfill them completely.
During the first quarter, investors submitted requests to withdraw approximately $1.2 billion from the fund — equivalent to 9.3% of its total net asset value. The firm processed $620 million in withdrawals before triggering the 5% cap that allows it to deny additional redemption requests for that period.
Shares of BLK fell roughly 5% during early Friday market activity. The decline added to existing pressure on the stock, which had already been weakening alongside broader concerns in the private credit industry.
The selloff rapidly infected the wider sector. Shares of Blue Owl Capital, KKR, Carlyle Group, Apollo Global Management, Ares Management, and TPG each declined by 5% to 6% on Friday.
BlackRock characterized the redemption restrictions as a protective mechanism rather than an emergency response. The company emphasized that these safeguards exist to avoid a fundamental disconnect between shareholder liquidity demands and the inherently long-term characteristics of private credit investments.
“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.
Private Credit Sector Faces Mounting Strain
The situation at BlackRock isn’t isolated. Blackstone recently elevated its typical 5% withdrawal cap to 7% and injected $400 million of corporate capital — supplemented by employee contributions — to satisfy all pending withdrawal requests.
Blue Owl has similarly attracted scrutiny after substituting immediate cash redemptions with commitments for future payments.
This surge in withdrawal demands signals increasing investor anxiety about private credit as an investment category. Capital deployed in these vehicles typically finances illiquid loans that cannot be rapidly liquidated — creating a fundamental tension that becomes acute when multiple investors simultaneously seek exits.
The HPS Corporate Lending Fund, operating under the ticker HLEND, functions as a non-traded business development company (BDC). During the previous quarter, it experienced redemption requests of approximately 4.1% — substantially lower than the current quarter’s 9.3% level.
Context Behind the HPS Acquisition
BlackRock purchased HPS Investment Partners for $12 billion last year, marking one of the company’s most substantial commitments to expanding its private credit capabilities.
The fund had announced its willingness to buy back up to 5% of outstanding shares last month, following standard operating procedures for non-traded BDCs.
Confidence in private credit investments had already taken hits last year when several funds disclosed connections to bankruptcy proceedings involving a domestic auto parts manufacturer and a subprime automotive financing company.
Financial markets have experienced considerable turbulence throughout 2025, with capital flowing toward lower-risk investments. This reallocation has intensified withdrawal pressure on private credit products that previously attracted investors seeking higher yields during more stable market environments.
At the time BlackRock announced the withdrawal restrictions, HLEND managed approximately $26 billion in total assets.
