BlackRock slams the gate on $26bn credit fund withdrawals

March 07, 2026 (MLN): BlackRock has restricted investor withdrawals from one of its largest private credit vehicles after redemption requests surged, which growing unease among investors about the rapidly expanding private lending market.

The asset manager said investors in its $26bn HPS Corporate Lending Fund sought to redeem about 9.3% of their holdings during the latest window.

However, the fund’s managers exercised a built-in liquidity control and limited repurchases to 5% of outstanding shares.

As a result, investors will receive roughly $620m, instead of the nearly $1.2bn that would have been required to meet all requests, according to Bloomberg.

According to the firm, the redemption cap is a standard feature of the strategy and helps maintain stability within the vehicle, which focuses on direct lending to corporate borrowers.

The product, commonly referred to as HLEND, invests primarily in private credit loans that typically have longer maturities than the liquidity offered to investors.

The decision marks one of the most notable instances of withdrawal limits being enforced by a major private credit manager in recent months.

Investor sentiment has also been affected by broader market uncertainty and worries that certain borrowers could face disruption from emerging technologies such as artificial intelligence.

Shares of BlackRock dropped as much as 8.3% following the news.

Stocks of other alternative asset managers, including KKR & Co. and Ares Management, also declined, putting the sector on track for its weakest start to a year in about a decade.

The HPS Corporate Lending Fund had already offered to repurchase up to 5% of shares during its latest tender period, a typical limit for semi-liquid investment vehicles.

In the previous redemption cycle, withdrawal requests totaled about 4.1%, allowing the fund to meet them fully.

The private credit platform at HPS Investment Partners acquired by BlackRock last year as part of its push into alternative assets  indicated that maintaining the withdrawal cap will help the fund remain positioned to pursue attractive lending opportunities during periods of market volatility.

BlackRock is the world’s largest asset manager, overseeing trillions of dollars in investments for governments, pension funds, institutions, and individual investors across the globe

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