American multinational investment company BlackRock has curbed withdrawals from one of its biggest private credit funds after client requests for redemptions spiked in the latest sign of retail anxiety about the US$1.8 trillion private credit industry. 

 

The firm’s $26 billion HPS Corporate Lending Fund (HLEND), one of the industry’s largest non-traded business development companies (BDC), said shareholders requested 9.3 percent of their shares. 

 

Management decided to limit repurchases at 5 percent, the company said in a statement on Friday.

 

Bloomberg calculations showed the requested shares would have amounted to around US$1.2 billion.

 

BlackRock said the step is consistent with its existing liquidity management approach and is a “foundational” feature of the fund.

 

“Without it, there would be a structural mismatch between investor capital and the expected duration of the private credit loans in which HLEND invests,” the statement said.

 

The non-traded BDC, offered last month to tender up to 5 percent of its shares, as is typical for such companies. In the previous period, withdrawals were about 4.1 percent.

 

Private credit funds are preparing for a wave of redemption requests amid growing concerns over lending practices and exposure to businesses that could be affected by artificial intelligence.

 

HPS Investment Partners, one of the largest alternative credit managers, was acquired by BlackRock last year.