BlackRock BLK-7.17% shares tumbled Friday after the asset manager said it had decided to limit withdrawals from one of its private credit funds following a wave of redemption requests in the first quarter.In a letter to shareholders, the HPS Corporate Lending Fund, known as HLEND, said it had received requests to repurchase approximately 9.3% of shares outstanding as of Dec. 31, 2025, exceeding the 5% framework for the first time since its inception. HPS told investors it would pay out $620 million, hitting the 5% limit.It was the latest scare for the private credit sector after Blackstone BX-4.46% on Tuesday disclosed that its flagship private credit fund, BCRED, saw record redemption requests in the first quarter.BlackRock tumbled 7.5% to $951.76 on Friday, making it one of the worst performing stocks in the S&P 500 SPX-1.33%. The benchmark index was down 1.2%.So-called alts are clearly under pressure. The panic began last month, when Blue Owl said certain business development companies had agreed to sell $1.4 billion in loan assets. The firm simultaneously halted quarterly redemption requests at one of its funds, saying it would return capital to investors through periodic payouts from asset sales and earnings going forward.Much of the present debate on Wall Street centers on whether investors have a crisis on their hands, similar to 2008. Oppenheimer analyst Chris Kotowski defended his Outperform rating on Blue Owl stock Thursday, arguing that the firm’s recent troubles weren’t symptomatic of a larger issue.Separately, Fitch Ratings said Friday that the default rate in its portfolio of U.S. privately monitored ratings hit a new high of 9.2% in 2025, up from 8.1% in 2024. The figure exceeded the 4.5% default rate recorded for Fitch’s broadly syndicated loan universe.Still, Fitch asserted that losses remained contained despite record-high defaults, writing that “realized losses for first lien lenders remained limited.”HPS, too, struck a cautiously optimistic tone. “Historically, periods of uncertainty and volatility have created some of the most compelling investment opportunities within private credit markets,” the fund wrote in its letter. “We believe that we are entering into that type of environment.”
