BlackRock restricts withdrawals from flagship private credit fund after outflows surge

BlackRock has limited withdrawals from its HPS Corporate Lending Fund due to a surge in redemption requests, reflecting concerns about the $2 trillion private credit sector. Shares of BlackRock fell 5.7% after the announcement.

In the first quarter, HLEND received withdrawal requests of $1.2 billion, breaching the 5% redemption limit for the first time.

The recent bankruptcies in the sector have raised questions about lending standards.

HLEND states that the 5% limit helps prevent a "structural mismatch" between investor capital and loan durations.

Currently, 19% of HLEND's portfolio is invested in software, which faces volatility amid economic concerns. HPS believes the current market conditions present opportunities for growth.