BlackRock Gates $26B Fund After Redemption Requests Hit 9.3%
BlackRock blocked further withdrawals from its $26 billion HPS Corporate Lending Fund after redemption requests reached 9.3%, exceeding the 5% quarterly limit. The fund gate sent shares down 7.17% and raised contagion concerns across the $2.8 trillion private credit sector.
1. Fund Redemption Cap Activation
BlackRock’s HPS Corporate Lending Fund saw redemption requests of 9.3% in Q1, surpassing its 5% quarterly withdrawal limit and triggering a gate on further redemptions. This marks the first instance the fund has activated its liquidity restrictions since launch.
2. Share Price Decline and Market Reaction
The announcement of the redemption cap sent BlackRock shares down 7.17% on the day, extending the stock’s year-to-date decline to over 12%. Market participants viewed the gate as a signal that asset valuations may not reflect true liquidity values.
3. Industry Contagion and Liquidity Concerns
The gating of a high-profile $26 billion private credit vehicle has heightened scrutiny of similar strategies at other asset managers, exposing the $2.8 trillion private credit industry’s vulnerability to illiquid holdings. Investors are now evaluating redemption terms and portfolio concentrations to assess potential spillover risks.