BlackRock has imposed limits on investor withdrawals from its HPS Corporate Lending Fund, a $26 billion private credit vehicle, following a surge in redemption requests. In the first quarter, the fund received withdrawal requests totaling approximately $1.2 billion, which represented about 9.3% of its net asset value.
Under the fund’s terms, BlackRock capped redemptions at a 5% quarterly threshold, resulting in payouts of $620 million while restricting the remainder to preserve liquidity and align with the illiquid nature of private credit investments.
This move highlights broader concerns in the $3 trillion private credit market, where funds often hold long-term, illiquid loans that are challenging to liquidate quickly without price disruptions, especially amid rising interest rates and potential credit tightening.
Register for Tekedia Mini-MBA edition 20 (June 8 – Sept 5, 2026).
Register for Tekedia AI in Business Masterclass.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab.
Similar pressures have affected competitors, such as Blackstone increasing its redemption cap to 7% and Blue Owl adjusting its fund structure to manage outflows. BlackRock emphasized that the restriction is a standard feature to protect the fund’s overall interests and enable continued investment in new opportunities.
Blackstone’s flagship private credit fund is the Blackstone Private Credit Fund (BCRED), the world’s largest non-traded business development company (BDC) in this space, with approximately $82 billion in total assets (including leverage) as of early 2026.
BCRED provides income-focused investors access to institutional-quality private credit, primarily through senior secured loans to large, performing U.S. companies often sponsor-backed.
It targets current income and capital appreciation, with a portfolio heavily weighted toward first-lien senior secured debt around 96-97% in recent snapshots, floating-rate loans, and diversification across industries like software, professional services, and healthcare.
Since its launch in January 2021, it has delivered strong performance, including a 9.8% annualized total return for Class I shares and a 9.7% annualized distribution rate as of early 2026. Like many semi-liquid private credit funds— non-traded BDCs, BCRED offers periodic liquidity through quarterly tender offers and redemptions rather than daily trading.
The standard quarterly repurchase limit is 5% of the fund’s shares, a common feature in the industry to manage the illiquid nature of underlying private loans and avoid forced sales that could harm remaining investors. In the first quarter of 2026 (Q1 2026), BCRED faced a record surge in redemption requests amid broader sector concerns over liquidity, valuations, and investor sentiment in private credit.
Requests totaled about 7.9% of the fund roughly $3.8 billion gross, exceeding the usual 5% cap. Blackstone responded by: Upsizing the quarterly tender offer to 7%; the maximum typically allowed without reopening terms. Injecting $400 million from the firm and its employees including $150 million from over 25 senior leaders into a feeder vehicle to cover the remaining ~0.9%, ensuring 100% of requests were met without gating or proration.
This resulted in $3.7 billion in gross payouts, offset by $2 billion in new commitments, for $1.7 billion in net outflows. Blackstone emphasized that the approach was driven by the fund’s tender offer structure—not liquidity constraints—and highlighted $8 billion in available cash at the end of 2025.
The firm and executives’ commitment aligned interests with shareholders during the pressure. This episode reflects industry-wide trends in the $2-3 trillion private credit market, where semi-liquid funds; popular with retail/wealth investors balance attractive yields with limited quarterly liquidity.
Competitors like BlackRock capping at 5% on its HPS fund and others have faced similar outflows, raising scrutiny over redemption mechanics in illiquid assets.