BlackRock private credit fund redemption requests ease in third quarter

Sept 11 — Asset manager BlackRock's flagship private credit fund received fewer withdrawal requests in ​the third quarter than in the previous period, offering an early sign that redemption pressures across the industry may be easing.

Investors ‌in BlackRock's $23.1 billion HPS Corporate Lending Fund sought to pull roughly 11.5% of shares, compared ⁠with 13.3% in the prior ​quarter, according to a regulatory filing ⁠on Friday. It will repurchase 5% of shares, the customary threshold ‌for such vehicles.

Wealthy individuals ‌have retreated from non-traded private credit funds this year over ⁠concerns about lending standards and the ⁠potential impact of AI on software companies, a key borrower base for direct lenders. Although, latest data suggests redemption pressure may be starting to ease as asset managers work through a backlog of unfulfilled withdrawal requests.

HLEND, one of the largest U.S. non-traded private credit ‌fund, has bought back roughly $1.7 billion of shares ​across three repurchase periods ended June 30, including about $600 million in the latest tender offer.

The fund said its underlying portfolio company performance remains strong and its portfolio remains highly diversified.

Since inception, its Class I shares have delivered a 9.9% annualized total net return through July 31, representing a 3.5% premium to broadly syndicated loan total ​returns.

Outflows from BlackRock's other smaller vehicles also showed signs of easing. Withdrawal requests ‌at BlackRock Private ‌Credit ⁠Fund fell to 4.58% in the third quarter, from roughly 5.3% in the prior quarter.

HPS Corporate Capital Solutions Fund saw withdrawal requests fall to 1.9%, from 4.7% in the prior quarter.

Blackstone kicked off the third-quarter redemption ‌season for major U.S. ​non-traded private credit funds last week. Other ‌vehicles are expected to ⁠release data ​throughout September.

(Reporting by Arasu Kannagi Basil and Pragyan Kalita in Bengaluru; Editing by ​Shilpi Majumdar)

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