TLDR
- The HPS Corporate Lending Fund, managed by BlackRock, saw withdrawal demands totaling $1.2 billion during the first quarter, representing 9.3% of its net assets
- The firm invoked a 5% redemption ceiling, distributing $620 million while blocking additional withdrawals
- Shares of BLK declined approximately 5% on Friday in response to the announcement
- Competing asset managers experienced similar losses: Blue Owl, KKR, Carlyle, Apollo, Ares, and TPG each dropped 5–6%
- Days earlier, Blackstone increased its redemption threshold from 5% to 7% and contributed $400 million to fulfill all investor requests
BlackRock (BLK) faced significant headwinds on Friday after its $26 billion HPS Corporate Lending Fund encountered a surge of redemption demands that exceeded manageable limits.
The fund received withdrawal requests totaling approximately $1.2 billion during Q1, equivalent to 9.3% of its net asset value. BlackRock distributed $620 million to investors, reaching the 5% cap that permits the firm to temporarily halt additional redemptions.
Shares of BLK tumbled roughly 5% during Friday’s early trading session. The stock had been experiencing downward momentum alongside broader weakness in the private credit industry.
The selloff rippled through the entire sector. Shares of Blue Owl Capital, KKR, Carlyle Group, Apollo Global Management, Ares Management, and TPG all declined between 5% and 6% on Friday.
BlackRock characterized the redemption restrictions as a predetermined safeguard rather than an emergency response. The company emphasized that these limits help avoid structural misalignment between investor liquidity needs and the illiquid nature 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 Challenges
BlackRock’s situation isn’t isolated. Blackstone recently elevated its typical 5% redemption limit to 7% and deployed $400 million of proprietary capital — combined with employee funds — to satisfy all pending withdrawal requests.
Blue Owl has similarly faced scrutiny after substituting cash redemptions with commitments for future distributions.
The surge in redemption activity signals growing investor concerns about private credit as an investment vehicle. These funds typically hold illiquid loan portfolios that cannot be liquidated rapidly — creating a fundamental tension when multiple investors simultaneously seek exits.
The HPS Corporate Lending Fund, designated as HLEND, operates as a non-traded business development company (BDC). During the previous quarter, redemption requests stood at approximately 4.1% — substantially lower than the current 9.3% level.
Context Behind the HPS Acquisition
BlackRock completed its acquisition of HPS Investment Partners in a $12 billion transaction last year, representing one of the firm’s most substantial commitments to the private credit sector.
The fund had announced plans to repurchase up to 5% of outstanding units last month, consistent with standard procedures for non-traded BDCs.
Investor confidence in private credit markets had already weakened last year following several funds’ exposure to bankruptcies involving a U.S. auto parts manufacturer and a subprime automotive lender.
Financial markets have experienced heightened volatility throughout 2025, with capital flowing toward more conservative investments. This trend has intensified redemption pressures on private credit products that previously attracted investors seeking higher yields during stable market conditions.
BlackRock’s HLEND managed $26 billion in assets when the withdrawal restrictions were implemented.
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