Key Takeaways
- The HPS Corporate Lending Fund managed by BlackRock faced $1.2 billion in Q1 withdrawal demands, representing 9.3% of its net asset value
- The asset manager limited redemptions to 5%, distributing $620 million while blocking additional withdrawals
- Shares of BLK declined approximately 5% during Friday’s trading session
- Competing asset managers experienced similar losses: Blue Owl, KKR, Carlyle, Apollo, Ares, and TPG all shed 5–6%
- Days earlier, Blackstone increased its redemption ceiling from 5% to 7% while contributing $400 million to satisfy all withdrawal requests
BlackRock (BLK) faced significant market headwinds Friday as its $26 billion HPS Corporate Lending Fund grappled with overwhelming redemption demands that exceeded its capacity to fulfill.
Investors sought to withdraw 9.3% of the fund’s net asset value during the first quarter — approximately $1.2 billion in total. The firm honored $620 million in redemptions before reaching the 5% cap that permits it to halt additional withdrawals for the quarter.
Shares of BLK tumbled roughly 5% during early Friday sessions. The stock had been experiencing downward momentum along with the wider private credit industry.
The selloff extended throughout the sector. Blue Owl Capital, KKR, Carlyle Group, Apollo Global Management, Ares Management, and TPG each experienced declines ranging from 5% to 6% on Friday.
BlackRock characterized the redemption restriction as a predetermined safeguard rather than an emergency response. The firm explained these limitations exist to avoid structural imbalances between investor liquidity needs and the extended time horizons 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.
Industry-Wide Redemption Concerns Intensify
Blackstone took similar action earlier in the week, elevating its typical 5% redemption threshold to 7% while injecting $400 million of proprietary capital — supplemented by employee funds — to accommodate all pending withdrawal requests.
Blue Owl has also attracted scrutiny after substituting client redemptions with commitments for future distributions instead of immediate cash payments.
The surge in withdrawal requests signals mounting skepticism toward private credit investments. Capital deployed in these vehicles is typically tied up in illiquid lending arrangements that cannot be rapidly liquidated — a fundamental tension that becomes acute when multiple investors simultaneously seek exits.
The HPS Corporate Lending Fund, trading under the name HLEND, operates as a non-traded business development company (BDC). During the previous quarter, it encountered redemption requests totaling approximately 4.1% — substantially lower than this quarter’s 9.3% figure.
Context Behind the HPS Acquisition
BlackRock completed its $12 billion acquisition of HPS Investment Partners last year, representing one of the company’s most significant strategic moves into the private credit sector.
The fund recently offered to buy back up to 5% of its outstanding shares last month, adhering to conventional procedures for non-traded BDCs.
Confidence in the private credit market had already sustained damage last year following revelations that certain funds held positions in companies that subsequently filed for bankruptcy, including a U.S. auto parts manufacturer and a subprime automotive lender.
Financial markets have exhibited heightened volatility throughout 2025, with capital flows shifting toward lower-risk investments. This reallocation has intensified withdrawal pressure on private credit products that previously attracted investors seeking elevated returns during periods of market stability.
BlackRock’s HLEND fund maintained $26 billion in assets under management when the withdrawal restriction was announced.
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