BlackRock Limits Private Credit Fund Withdrawals Amid 'Redemption Surge'

BlackRock has imposed restrictions on withdrawals from its private credit fund due to a surge in redemption requests. This move has caused significant selling pressure on the company's stock. Several sources report that the trust crisis for a major private equity firm may also be connected to this issue.

BLK curbed withdrawals from its $26 billion HPS Corporate Lending Fund after client redemption requests spiked to 9.3% of shares — nearly double the fund's 5% quarterly repurchase cap. While the total value of shares tendered would have been approximately $1.2 billion, investors will receive roughly $620 million, the amount the fund held at year-end.

The decision, announced March 6, marks the first time the non-traded business development company has breached its quarterly redemption threshold since inception. BlackRock said the step is consistent with its existing liquidity management framework and is designed to prevent a structural mismatch between investor capital and the expected duration of private credit loans.

The move has broader implications for the $1.7 trillion private credit market, which has attracted record inflows in recent years but faces growing questions about liquidity risk in semi-liquid fund structures. Bloomberg reported that BlackRock and Blackstone are both confronting elevated withdrawals as redemptions surge across the private credit sector, raising concerns about potential contagion if investor confidence erodes further.