NEW YORK, March 9, 2026, 09:37 EDT
BlackRock Inc is restricting withdrawals from its $26 billion HPS Corporate Lending Fund after investors sought to pull roughly $1.2 billion—about 9.3% of assets—surpassing the fund’s 5% quarterly redemption ceiling. Just $620 million in redemptions will be honored, marking the first breach of that threshold since the fund launched. Shares of BlackRock dropped 6.7% on Friday. Morningstar’s Greggory Warren called it a “warning sign” for both the industry and regulators. Reuters
The shift drops the world’s largest asset manager right into the thick of private credit’s growing pains, with default risks now climbing. On Friday, Fitch reported that defaults among U.S. private-credit borrowers it monitors surged to an unprecedented 9.2% in 2025.
Larry Fink’s push to expand faces an odd hiccup here. January saw BlackRock post a record $14.04 trillion in assets, plus $12.7 billion in private-markets inflows for the fourth quarter. And after nailing down a roughly $12 billion HPS deal late in 2024, Fink declared BlackRock was heading into 2026 with “accelerating momentum.” Reuters
HLEND operates as a non-traded business development company, or BDC, pooling investor capital to extend loans mainly to mid-sized firms. While it provides only limited liquidity each quarter, its underlying loans don’t move quickly when sold—setting up what HLEND described as a “structural mismatch” if redemption requests pile up. As of Feb. 28, HPS reported the fund held more than $4.4 billion in available liquidity. Subscriptions reached about $840 million in the first quarter. HPS Corporate Lending Fund
Pressure across the sector isn’t hard to spot: Blackstone let investors pull $3.7 billion from its $82 billion BCRED fund—well above the usual cap—after it bumped the withdrawal limit to 7% and kicked in $400 million from the firm and staff. Blue Owl, for its part, said in February it’s unloading $1.4 billion in assets and scrapping quarterly redemptions in a fund for good. Still, Blackstone President Jon Gray insisted big institutional players “continue to allocate significant amounts” to private credit. Reuters
The pressure spilled over into the wider market by Monday. Investors, jittery after several credit flare-ups, zeroed in on BlackRock and Blackstone’s private-credit funds as key barometers for further trouble.
But where things go from here remains unclear. Last week, Bank of Canada Governor Tiff Macklem flagged that private credit’s lack of transparency leaves investors with limited visibility into loan quality. He cautioned that if defaults surge, “severe strains” could follow, potentially rippling into public credit markets. Reuters
For BlackRock, the incident is minor compared with its massive ETF business, but it affects the unit tasked with ramping up growth. Private assets carry much steeper fees than ETFs, and BlackRock has pointed out to investors that it wants private-markets and technology operations making up at least 30% of revenue by 2030—double the 15% share in 2024.
