BlackRock has halted fundraising for its latest Asia-Pacific private credit strategy, as the world’s largest asset manager integrates its newly acquired business, HPS Investment Partners, according to a report by Bloomberg.
The report cites unnamed people familiar with the matter as revealing that capital raising for the firm’s third Asia-Pacific private credit fund stalled earlier this year following the announcement in December of BlackRock’s $12.5bn acquisition of HPS. The deal closed on 1 July. The fund had been targeting $1bn, but had secured less than half that amount by the time of the pause.
The move adds to a period of uncertainty for BlackRock’s ambitions in Asian private markets. In June, the firm and Abu Dhabi’s Mubadala Investment Co mutually agreed to unwind their regional private credit partnership, citing difficulties in sourcing attractive deals. Meanwhile, key investor Arch Capital Group is reportedly looking to offload at least $350m in stakes across BlackRock’s private strategies following performance challenges and senior-level turnover.
The broader private credit market is also under pressure. Global fundraising slowed to $70bn through 22 July, just a tenth of alternative asset inflows this year and the lowest share since at least 2015, according to JPMorgan. At the same time, default rates on private credit deals – at 5.4% including non-accrual loans – are now broadly in line with the syndicated loan market, fuelling concerns that risks in the $1.7tn sector may be under appreciated.
