BlackRock’s shares have tumbled after the asset manager curbed withdrawals from one of its private credit funds following a surge in redemption requests.
On Friday (6 March), BlackRock wrote in a letter to investors that during the first quarter of 2026 the firm’s $26bn (£19.4bn) business development company (BDC), HPS Corporate Lending Fund (HLEND), saw investors request withdrawals equivalent to 9.3 per cent of the fund’s total shares.
However, management decided to cap repurchases at five per cent, its quarterly limit, which amounted to approximately $620m. HLEND executives stated in the letter that this decision was made with best interest of all shareholders in mind.
Following the move, BlackRock shares fell around seven per cent in morning trading. Similar declines were also seen among major private credit players including Blue Owl Capital, KKR, Carlyle and Ares Management.
BlackRock’s decision to limit investor withdrawals follows other players in the industry also being hit by rising redemption requests from their BDCs, as investors begin to grow increasingly skittish about the asset class. Investor anxiety increasingly being fuelled by concerns over the sector’s exposure to software businesses under pressure due to the progression of artificial intelligence.
In the letter to investors, BlackRock stated that HLEND’s liquidity framework is “foundational” in enabling the fund’s returns, which it stated has generated 10.7 per cent of annualised total net returns.
“Without it, there would be a structural mismatch between investor capital and the expected duration of the private credit loans in which HLEND invests,” the letter said.
HPS Investment Partners, which manages HLEND, has roughly $185bn in assets under management and is one of the largest alternative credit managers. It was purchased last year by BlackRock as part of the firm’s effort to expand further into private assets.
In the letter, HPS stated that HLEND has “significant” liquidity amounting to $4.4bn as of February 2026 and raised $840m of subscriptions in the first quarter of 2026.
Similar moves were made last month when Blue Owl Capital restricted investor redemptions from one of its retail debt funds while selling $1.4bn of direct lending investments to boost liquidity.
Meanwhile, others such as Blackstone have increased redemption limits, raising them to 7.9 per cent for one of its evergreen private credit funds in the quarter.
Overall, the pressure is beginning to show cracks in alternative managers’ push into the retail market, highlighting the reality that retail investors do not behave in the same way as institutional investors.
