Particle.news
Download on the App Store

Private-Credit Funds Hit Redemption Caps as Regulators Step Up Scrutiny

Large bank loans to private lenders raise contagion risk.

Overview

  • Investors have rushed to pull cash from semi-liquid private-credit funds, and last quarter many were paid only up to the 5% redemption cap.
  • BlackRock reported $9 billion in first-quarter inflows to its private markets and said a shakeout will split stronger from weaker managers.
  • BlackRock’s HPS Corporate Lending Fund limited withdrawals after investors sought to redeem 9.3% of shares against a 5% quarterly limit.
  • Regulators are mapping risks as the Federal Reserve asks banks for detailed exposure data and Australia’s ASIC tightens oversight, with the Financial Stability Board preparing a sector report.
  • The US Treasury estimates banks have $410 billion to $540 billion in loans to private-credit vehicles, a link that could transmit stress into the banking system.