🚨 BlackRock restricts fund withdrawals from the credit fund to $26 billion

One of the world's largest asset managers has faced a sharp outflow of capital from the HPS Corporate Lending Fund, which invests in the private credit market.

• Investors have submitted withdrawal requests for 9.3% of the fund's assets
• Managers have approved only a 5% withdrawal
• Instead of the expected ~$1.2 billion, investors will receive about $620 million

The fund invests in long-term corporate loans. Such assets cannot be quickly sold without significant discounts, so during a sudden outflow of funds, funds are forced to limit capital withdrawals.

If the outflow continues, funds may need to:

• sell loans to companies at a discount
• realize losses
• tighten lending conditions

This could increase pressure on the private debt market, which already has hundreds of billions of dollars in loans accumulated.

The situation does not yet appear to be a systemic crisis, but such restrictions are a classic sign of liquidity stress. If similar cases begin to recur in other funds, the market could face a "domino" effect in the private credit sector.

The fun is just beginning ?🤔
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