BlackRock Fund Redemptions
BlackRock Tightens Private Credit Fund Redemptions as Investor Withdrawals Exceed Caps
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Key Points
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Reuters reported that BlackRock’s private credit funds “raise funds mainly in the retail market” and “lend to mid-sized companies,” providing context for why redemption pressure could translate quickly into liquidity demands for the manager.
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In its filings, BlackRock described the HPS Corporate Lending Fund’s structure—based on returns from assets that “rarely trade”—as allowing it “to provide investors a premium return,” while the BlackRock Private Credit Fund said it “serves the long-term interest of all BDEBT's shareholders.”
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Reuters noted that HLEND also linked the redemption-gap period to operating conditions, saying that “expectations of higher interest rates could mean better opportunities for it to make money.”
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Reuters/MarketScreener added two additional signals of broader stress: a preliminary estimate that investors in the $2.2 billion HPS Corporate Capital Solutions Fund asked to redeem about 4.7% of shares, and BlackRock said its private debt business is worth $203 billion.
BlackRock said on June 12, 2026 that two of its private credit funds hit their 5% quarterly redemption caps after investors asked to pull far more. The HPS Corporate Lending Fund, known as HLEND, saw requests to redeem 13.3% of its shares in the first quarter — nearly three times the limit — and will repurchase about $620 million, according to Reuters. It is the second straight quarter HLEND has capped withdrawals.
The BlackRock Private Credit Fund, called BDEBT, hit its cap for the first time since launching in June 2022. Investors asked to pull 5.3% of shares, and BlackRock will buy back about $83 million, GuruFocus reported. BlackRock manages $203 billion in private debt overall.
Why Private Credit Funds Struggle to Pay Investors Back
Private credit funds lend money to mid-sized companies using loans that rarely trade on open markets. Because there is no easy way to sell those loans quickly, the funds can struggle to raise cash fast when many investors want out at once. BlackRock described this structure as allowing it "to provide investors a premium return" over public credit markets, according to Reuters.
These funds raise money mainly from retail investors — everyday people, not just big institutions. Reuters noted that makes them more vulnerable to "herd behavior," where many small investors try to exit at the same time. To protect remaining shareholders from a fire sale of loans, BlackRock built a 5% quarterly redemption cap into both funds from the start.
Redemption Requests Nearly Doubled in One Quarter
HLEND's withdrawal requests jumped from about 9.3% in the previous quarter to 13.3% this quarter — a roughly 50% increase. Benzinga reported that the fund holds about $25 billion in assets. Of the 13.3% requested, BlackRock will honor only 5%, worth roughly $620 million.
A third fund, the $2.2 billion HPS Corporate Capital Solutions Fund, also showed signs of stress. MarketScreener reported a preliminary estimate that investors asked to redeem about 4.7% of that fund's shares — just under the 5% cap. BlackRock said it is still finalizing those figures.
AI Disruption and Valuation Fears Spooked Investors
Much of the concern centers on who these funds lend to. Many borrowers are mid-sized software companies that built their business on recurring subscription fees. Artificial intelligence tools are now threatening to replace the software those companies sell, which could squeeze their earnings and their ability to repay loans. Matthew Mish of UBS said "AI disruption risk is going to be increasingly reflected over 2026 to early 2027," according to Reuters.
Because the loans rarely trade, their stated values may not reflect those risks yet. That gives savvy investors a reason to exit now, while valuations still look high. Law firms have also begun investigating whether financial advisors properly warned retail investors about these illiquidity risks before they invested, ZeroHedge noted.
BlackRock Calls the Cap a Shield, Not a Trap
BlackRock framed the redemption limits as a tool to protect all shareholders, not punish those trying to leave. In a shareholder letter, the firm said the cap "serves the long-term interest of all BDEBT's shareholders" and is critical to the fund's ability to generate returns over time. HLEND also noted that higher interest rates could create "better opportunities for it to make money," according to Reuters.
Critics see it differently. Retail investors who bought these funds as income-generating alternatives to bonds now find they cannot access their principal when they want it. ZeroHedge reported that other major managers, including Blackstone and Cliffwater, also began gating their flagship private credit funds for the first time on the same day as BlackRock's announcement.
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