TLDR
- The HPS Corporate Lending Fund managed by BlackRock saw withdrawal demands totaling $1.2 billion during Q1, representing 9.3% of its net asset value
- The firm invoked its 5% redemption ceiling, distributing $620 million while blocking additional exits
- Shares of BLK declined approximately 5% during Friday’s session
- Competing asset managers experienced similar declines: Blue Owl, KKR, Carlyle, Apollo, Ares, and TPG each lost 5–6%
- Days prior, Blackstone increased its redemption cap from 5% to 7% and contributed $400 million to satisfy all withdrawal demands
BlackRock (BLK) experienced a sharp selloff Friday after imposing withdrawal restrictions on its $26 billion HPS Corporate Lending Fund amid overwhelming redemption demands.
The fund received exit requests totaling approximately $1.2 billion during the first quarter — equivalent to 9.3% of its net asset value. Management honored $620 million in withdrawals before activating the 5% redemption gate that permits halting additional exits for the quarter.
Shares of BLK plummeted roughly 5% during early Friday trading hours. The decline extended existing weakness across the private credit industry.
The selloff rippled throughout the alternative asset management sector. Blue Owl Capital, KKR, Carlyle Group, Apollo Global Management, Ares Management, and TPG each registered losses ranging from 5% to 6% on Friday.
BlackRock characterized the withdrawal restriction as a protective mechanism rather than an emergency response. Company representatives stated the limitations prevent structural misalignment between liquid investor capital and the illiquid nature of underlying private credit assets.
“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 Redemption Pressure
BlackRock’s situation isn’t isolated. Blackstone announced earlier this week it was lifting its typical 5% redemption threshold to 7% while injecting $400 million of proprietary capital — supplemented by employee funds — to fulfill all pending withdrawal requests.
Blue Owl has similarly attracted scrutiny after substituting immediate cash redemptions with commitments for future distributions.
The surge in exit requests signals increasing investor apprehension regarding private credit as an investment category. Capital allocated to these vehicles is typically tied up in illiquid lending positions that cannot be liquidated rapidly — creating significant friction when numerous 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, it encountered redemption requests approximating 4.1% — significantly below the current quarter’s 9.3% figure.
Context Behind the HPS Acquisition
BlackRock purchased 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 extended its standard quarterly offer to repurchase up to 5% of outstanding units last month, consistent with typical procedures for non-traded BDCs.
Investor confidence in private credit had already suffered last year following revelations that certain funds held exposure to bankruptcies involving a U.S. auto parts manufacturer and a subprime automotive lender.
Financial markets have demonstrated heightened volatility throughout 2025, with capital flows redirecting toward more conservative investments. This reallocation has intensified withdrawal pressure on private credit products that previously attracted investors seeking elevated yields during more stable market environments.
BlackRock’s HLEND managed $26 billion in total assets when the withdrawal restriction was announced.
