🚨Another major US private credit fund is locking investors out:

BlackRock's HPS Corporate Lending Fund, known as HLEND, capped investor withdrawals at 5% for the 2nd consecutive quarter.

This comes after redemption requests surged to ~$1.6 billion, or ~13.3% of net assets, up from 9.3% in the prior quarter.

The fund, with an investment portfolio worth ~$25 billion, honoured just ~$620 million of those requests, meaning investors seeking to exit were unable to access more than $1 billion of their capital.

This comes as Blackstone enforced the same 5% redemption limit on its flagship private credit fund this quarter for the first time, having previously tapped senior executives to contribute hundreds of millions of their own cash in Q1 to satisfy a record 7.9% redemption rate.

Cliffwater, Monroe Capital, and BlackRock's smaller BDEBT fund, which exceeded the 5% threshold for the first time in its 4-year history, have all enforced withdrawal limits this quarter, pointing to an industry-wide acceleration in exit requests.

The stress is being driven by concerns over underwriting quality, rising defaults, AI disruption of enterprise software borrowers, and maturing debt from the era of ultra-low rates.

Redemption requests across the $1.8 trillion private credit industry are widely expected to continue rising, as investors who were restricted in prior quarters redouble efforts to recover their capital.

The private credit liquidity crunch is no longer a risk, it is unfolding in real time.