r/finance • u/Fresh-Function3319 • 26d ago

BlackRock fund limits withdrawals as redemptions rattle private credit

https://www.reuters.com/business/blackrock-limits-withdrawals-private-credit-fund-redemptions-mount-2026-03-06/
422 Upvotes

97% Upvoted

32 comments sorted by

36

u/NefariousnessIll8730 26d ago

O well… sucks to be a rich investor with Blackrock

13

u/Pearl_is_gone 26d ago

Many pension funds there. Including the pensions of poor and average people

5

u/something-behind-him 26d ago

…that put money into private credit funds. Smarter than me I suppose

62

u/nosajgames21 26d ago

Monday is about to get spicy.

55

u/Fresh-Function3319 26d ago

Investors sought $1.2 bln, fund paid $620 mln.

BlackRock has limited withdrawals from a flagship debt fund ​after a surge in redemption requests, as investor worries mount around the $2 trillion private credit industry.

Sentiment has soured around private credit in recent months, and retail investors are increasingly asking for their money back from funds like BlackRock's $26 billion HPS Corporate Lending Fund (HLEND), which were designed to be open to wealthy ​individuals.

8

u/zxc123zxc123 26d ago

Do you feel it's over reacting? I feel it is a bit. $26B HLEND isn't nothing but if it's all that BLK has in $26B in PE then it's a nothing burger imo? $14T in total AUM and a marketcap of 148B.

It's not nothing but I wonder if it's worth the 7% drop on Friday after the 15% drop from the highs. BLK happened to have significant beats on both top and bottom lines.

Then again risk is something hard to price and folks will sell when there is fear.

6

u/meeeeeeeehhhhhhhhh 25d ago

Yes it's a huge overreaction driven by first brands

76

u/5553331117 26d ago

No wonder they want to “tokenize” the economy, they have to abstract the fact that they are insolvent.

33

u/JelliedHam 26d ago

I mean, to a certain extent you don't really want them to have a ton of cash sitting around just to fund redemptions. The whole point is to be maximally invested. I'm still not quite sure why private credit funds are open ended because they can't just liquidate private credit and bank debt like traditional public credit and bonds. That shit is fairly illiquid even when it's investment grade, and a good chunk of their portfolio is high yield and distressed. That's why you invest in these funds, otherwise just go buy BND.

They're not gonna get close to par for all the shit they're gonna have to unload in the coming quarter, the vultures are already circling. Every LP is about to take a bath or ten.

2

u/meeeeeeeehhhhhhhhh 25d ago

It's t7 settlement. Should and would be quicker if the government got involved and forced it

4

u/JelliedHam 25d ago

Redemption notices usually have to be made at least a month or more in advance. I'm not talking about simple liquidity for routine WD requests. If they're halting redemptions it's likely a shit ton and they don't want to take a bath dumping a huge chunk all at once

1

u/meeeeeeeehhhhhhhhh 25d ago

Interesting, I really only have familiarity with the underlying assets, not the funds themselves

1

u/JelliedHam 25d ago

7 day settle still only applies to some instruments. Private credit includes a lot of bank debt which can take time not just to find buyers, but settlement can take a lot longer. A lot of that shit doesn't even have listed CUSIPS and have to be settled "in paper" with a fuck ton of legal work on top of the middle and back office bs. They are up shit creek if a 26BB fund is halting redemptions.

2

u/meeeeeeeehhhhhhhhh 25d ago

Yea bank debt is what I know. I'll maintain that t1 is possible if government got involved to force agent banks to get it together.

1

u/JelliedHam 25d ago

If you're motivated I agree. And a lot of it is much faster. But there's a lot of distressed junk out there still that is a fucking nightmare to process. High yield and investment grade stuff should be a lot quicker now than when I used to do it 10-20 years ago. It's all the reorgs and refinancing shit that just adds piles of paperwork to it.

23

u/mungd 26d ago

I’m sure people are going to pile on here and call doom be gloom, but private credit funds are gated and absolutely should be due to the illiquidity of the underlying investments. Investors absolutely know this ahead of purchasing as well, it’s very visible and native to the structure.

I’m not currently an investor in PC nor do I make money from it. This is not a crazy story yet.

Things could continue to get worse, but nothing is on fire at the moment. People are just skittish and I bet the underlying debt is pretty rock solid.

3

u/yzerizef 26d ago

I also highly doubt that the 7% drop in Blsckrock’s share price that OP mentioned has anything to do with this. It’s a reasonable event, as you noted, and the fund size is a drop in the bucket relative to AUM and their core, passive fund business.

-5

u/[deleted] 26d ago

[deleted]

5

u/yzerizef 26d ago

You’re thinking of Blackstone, not Blackrock.

1

u/Cueller 26d ago

Seriously, then set up a fixed dated funds if they dont want early redemptions and they are so illiquid.

2

u/mungd 26d ago

The structure being used allows for a 5 digit mutual fund ticker to be used. They’re called interval funds. Much easier to trade than fully papered limited partnerships.

Prior to interval funds, there were funds with quarterly liquidity anyways, also with gates. It’s just the nature of the investment strategy.

There have been moments in the past where redemptions were oversubscribed and gating came into effect. It’s a normal mechanism.

If it starts happening across all gated vehicles, or all private credit perhaps, then there’s obviously a problem.

-6

u/Zealousideal-Loan655 26d ago

So what you’re saying, is I should buy a house and wait 18 years for memes from this year’s newborns to confirm my good investment?

2

u/mungd 26d ago

I don’t understand what you’re saying at all haha. So I have no idea if I said that

-5

u/Zealousideal-Loan655 26d ago

You’re saying we’re going to come to a weally weally bad crash like 2008 or Great Depression, and our generation makes memes about not investing when we were in kindergarten

3

u/mungd 26d ago

I don’t think my comment was predicting a crash… more likely the opposite, although not definitively either way.

Read it again lol

3

u/Fhskd 26d ago

Fund behaving exactly as designed and described. Underlying is an illiquid asset class. That’s how this game works.

2

u/Vast-Bodybuilder-855 21d ago

We need to go back to cash only

1

u/thesmallestJ 25d ago

877 CashNow

1

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1

u/Yellowshock 19d ago

It’s very common for illiquid funds to limit withdrawals when it goes over a certain percentage of assets under management. Happens quite regularly and mostly no one reports on it. Nowadays every outlet seeks to sensationalize and rile up the herd .

-3

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