Key Takeaways
- • BlackRock's $23.1bn HPS Corporate Lending Fund received redemption requests for 11.5% of shares in Q3, declining from 13.3% in Q2, signaling potential relief in sector-wide withdrawal pressure on non-traded private credit funds.
- • The fund will repurchase 5% of shares at its standard quarterly limit, with the redemption backlog beginning to clear according to Evercore analyst Glenn Schorr, who expects broader slowdown in BDC redemption requests ahead.
- • Investor concerns over underwriting standards and artificial intelligence's impact on software companies—which represent significant portions of direct-lending portfolios—appear to be moderating as managers work through outstanding withdrawal backlogs.
- • HLEND, among the largest U.S. non-traded private credit funds, has repurchased approximately $1.7bn in shares across three tender periods through June 30, with $600 million in its most recent offering, citing strong portfolio company performance and diversified underlying investments.
Summary
BlackRock's flagship private credit vehicle is showing early signs of stabilization in redemption activity, with withdrawal pressure easing in the third quarter. According to regulatory filings cited by Reuters, investors in BlackRock's $23.1bn HPS Corporate Lending Fund submitted redemption requests for approximately 11.5% of shares during Q3, down materially from 13.3% in the second quarter. The fund will honor 5% of redemption requests in line with its standard quarterly repurchase limit for non-traded vehicles.
The moderation in redemption requests reflects a potential shift in investor sentiment toward the private credit sector after months of sustained outflows. Throughout 2026, wealth investors have withdrawn capital from private credit funds amid mounting concerns over underwriting standards and the potential disruption to software companies—a core component of direct-lending portfolios—from artificial intelligence adoption. These headwinds prompted significant redemption queuing at major non-traded private credit vehicles earlier in the year.
Evercore analyst Glenn Schorr characterized the improved redemption data as a positive signal, noting that the backlog is now clearing and positioning the sector for a potential slowdown in redemption requests across business development companies. The commentary suggests investor confidence in private credit valuations and manager performance may be stabilizing after an extended period of concern.
Broader market activity supports this narrative. HLEND, one of the largest U.S. non-traded private credit funds, has repurchased approximately $1.7bn of shares across three tender periods through June 30, including $600 million in its most recent offering. HLEND highlighted strong performance from portfolio companies and well-diversified underlying investments, reinforcing evidence that underlying credit quality remains intact despite macro uncertainty and technology sector headwinds.
The moderation in redemption requests reflects a potential shift in investor sentiment toward the private credit sector after months of sustained outflows. Throughout 2026, wealth investors have withdrawn capital from private credit funds amid mounting concerns over underwriting standards and the potential disruption to software companies—a core component of direct-lending portfolios—from artificial intelligence adoption. These headwinds prompted significant redemption queuing at major non-traded private credit vehicles earlier in the year.
Evercore analyst Glenn Schorr characterized the improved redemption data as a positive signal, noting that the backlog is now clearing and positioning the sector for a potential slowdown in redemption requests across business development companies. The commentary suggests investor confidence in private credit valuations and manager performance may be stabilizing after an extended period of concern.
Broader market activity supports this narrative. HLEND, one of the largest U.S. non-traded private credit funds, has repurchased approximately $1.7bn of shares across three tender periods through June 30, including $600 million in its most recent offering. HLEND highlighted strong performance from portfolio companies and well-diversified underlying investments, reinforcing evidence that underlying credit quality remains intact despite macro uncertainty and technology sector headwinds.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.