BlackRock has limited investor withdrawals from its $13bn HPS Corporate Lending Fund for a second consecutive quarter, after redemption requests continued to exceed the amount the fund is able to return under its liquidity framework, according to a report by the Financial Times.
The firm said investors sought to redeem roughly $1.6bn in the latest quarter, up from $1.2bn in the previous period. In response, the fund only honoured around 5% of net assets—equivalent to approximately $620m – well below total redemption demand.
The fund, which was acquired as part of BlackRock’s $12bn purchase of HPS Investment Partners last year, is one of the group’s flagship private credit vehicles and has grown to manage a broader leveraged loan portfolio of nearly $25bn.
BlackRock said the structure of the fund is designed to match investor liquidity with the longer-term nature of private credit assets, noting that the 5% quarterly withdrawal mechanism is consistent with its stated framework. HPS also said it expects incoming capital commitments to help offset outflows over time.
The broader private credit sector, which manages roughly $2tn in assets, has seen rising redemption requests from retail and wealth investors over the past year. Several major managers, including Blackstone, Ares Management and Apollo Global, have reported similar pressures and have also implemented limits on outflows.
Industry outflows have been influenced by a combination of factors, including lower interest rates reducing returns, concerns over credit quality following recent corporate bankruptcies, and heightened scrutiny of underwriting standards in parts of the market.
Despite the recent volatility, BlackRock continues to expand its private markets platform under CEO Larry Fink, including acquisitions across credit, infrastructure and data assets. The firm has also set ambitious long-term revenue targets for its private investment business, with retail-focused vehicles expected to play a key role in future growth.
