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Private Credit Squeeze Deepens as BlackRock Caps Withdrawals and Blackstone Meets Record Exits

Fresh limits on withdrawals spotlight the liquidity mismatch in retail-facing private credit funds.

Overview

  • BlackRock restricted redemptions from its $26 billion HPS Corporate Lending Fund after investors sought about $1.2 billion, paying roughly $620 million before hitting a 5% quarterly cap and gating the remainder.
  • BlackRock disclosed a full write-down of a $25 million loan in its latest filing, and its shares fell around 6%–7% as investors reassessed risks in opaque, long-dated private loans.
  • Blue Owl previously shifted its Capital Corporation II vehicle away from scheduled quarterly liquidity and sold roughly $1.4 billion of loans to fund periodic payouts to investors.
  • Blackstone’s $82 billion BCRED faced record redemption requests of about $3.8 billion (7.9%) and the firm said it met 100% by upsizing a tender and tapping executive and employee funds.
  • Shares of major alternative managers fell as analysts highlighted retail-driven liquidity strains, sector exposures in software and AI, and potential spillovers including stress in tokenized private-credit markets used in DeFi.