NEW YORK, March 9, 2026, 09:37 EDT 1
BlackRock Inc has capped withdrawals from its $26 billion HPS Corporate Lending Fund after clients asked to redeem about $1.2 billion, or 9.3% of the fund’s value, above its 5% quarterly limit. The fund said it would meet about $620 million of those requests, the first time demand has breached that cap since inception. BlackRock shares fell 6.7% on Friday, and Morningstar analyst Greggory Warren called the move a “warning sign” for the industry and regulators. 2
The move puts the world’s largest asset manager in the middle of a sharper test for private credit — lending done outside the banking system — as default pressure rises. Fitch said Friday that defaults among U.S. private-credit borrowers it tracks hit a record 9.2% in 2025. 3
It also lands awkwardly for Larry Fink’s expansion drive. In January, BlackRock reported a record $14.04 trillion under management and $12.7 billion of fourth-quarter private-markets inflows, and Fink said the firm entered 2026 with “accelerating momentum” after BlackRock struck a roughly $12 billion HPS deal in late 2024. 4
HLEND is a non-traded business development company, or BDC, a vehicle that raises money from investors and lends it mainly to mid-sized companies. It offers limited quarterly liquidity, but the loans it owns do not sell fast, creating what HLEND called a “structural mismatch” when too many investors head for the exit at once. HPS said the fund had more than $4.4 billion of available liquidity at Feb. 28 and took in roughly $840 million of subscriptions in the first quarter. 5
Blackstone and Blue Owl show how quickly that pressure can spread. Blackstone let clients pull a bigger-than-usual $3.7 billion from its $82 billion BCRED fund by lifting its normal limit to 7% and backing the vehicle with $400 million from the firm and employees, while Blue Owl said in February it would sell $1.4 billion of assets and permanently remove quarterly redemptions in one fund. Blackstone President Jon Gray said institutions still “continue to allocate significant amounts” to private credit. 6
By Monday, the strain had become a broader market theme. Investors were bracing for more bad news after a string of credit flashpoints, with BlackRock and Blackstone’s private-credit funds among the most closely watched pressure points. 7
But the path from here is not settled. Bank of Canada Governor Tiff Macklem warned last week that the opacity of private credit means investors may not have enough information about loan quality, and that a spike in defaults could cause “severe strains” and spill into public credit markets. 8
For BlackRock, the episode is small next to its ETF franchise, but it hits the part of the firm meant to drive faster growth. Private assets generate significantly higher fees than ETFs, and BlackRock has told investors its private-markets and technology businesses should account for 30% or more of revenue by 2030, up from 15% in 2024. 9
