Investing.com — BlackRock (NYSE:BLK) shares fell 5% Friday after Bloomberg reported the asset manager capped withdrawals from its $26 billion HPS Corporate Lending Fund, adding to concerns about the private credit industry.
The decline pressured other private equity firms, with Blue Owl Capital down 6%, KKR falling 6%, Carlyle Group dropping 6%, Apollo Global Management declining 5%, Ares Management falling 6%, and TPG Inc. sliding 5%.
According to the report, shareholders requested redemptions of 9.3% of their shares from the HPS Corporate Lending Fund, one of the industry’s largest non-traded business development companies. Management capped the repurchase at 5%, which would have totaled around $1.2 billion based on Bloomberg calculations.
BlackRock said the move aligns with existing liquidity management for the fund and represents a foundational feature. The company stated that without such limits, there would be a structural mismatch between investor capital and the expected duration of private credit loans.
The non-traded BDC, known as HLEND, offered to tender up to 5% of its shares last month, typical for such business development companies. The fund faced withdrawals of about 4.1% in the prior period.
Private credit funds are facing increased redemption requests amid growing concerns about the industry’s lending practices.
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