BlackRock’s HPS Corporate Lending Fund Limits Redemptions After Requests Exceed 5% Cap
HPS Corporate Lending Fund, or HLEND, a non-traded business development company managed by BlackRock’s HPS Investment Partners, capped investor withdrawals after redemption requests exceeded the fund’s quarterly liquidity limit for the first time since launch.
In a letter to shareholders Friday, the fund said repurchase requests for the first quarter of 2026 totaled 9.3% of outstanding shares, nearly double its established 5% quarterly cap. HLEND’s board approved repurchases of 5% of shares outstanding, amounting to roughly $620 million.
The move highlights a structural feature of many retail-focused private credit vehicles distributed through financial advisers: periodic liquidity limits designed to align investor capital with the longer duration of private loans. When withdrawal requests exceed those limits, funds typically prorate repurchases or cap them at preset thresholds.
HLEND’s redemption limit also reflects broader liquidity pressures emerging across retail-focused private credit vehicles. Several large funds offering periodic liquidity have recently faced elevated withdrawal requests as investors reassess liquidity terms in products tied to less-liquid private loans. Managers including Blackstone, Starwood, and Blue Owl Capital have taken varying approaches to managing redemption demand, ranging from maintaining preset caps to expanding tender capacity.
The fund said the decision to limit withdrawals was consistent with its liquidity framework, which is intended to balance periodic investor liquidity with the long-term nature of private credit investments.
“In our judgment, preserving the fund’s available capital to pursue this opportunity set, while providing liquidity to shareholders consistent with the fund’s designed parameters, is in the best interest of the fund as a whole,” the shareholder letter stated.
HLEND emphasized that unfulfilled repurchase requests do not automatically carry over into the next tender-offer period. Investors seeking liquidity must resubmit requests during the next repurchase window.
Shares not submitted for repurchase will remain enrolled in the fund’s distribution reinvestment plan, or DRIP. However, the portion of repurchase requests that was not fulfilled will no longer participate in the DRIP unless investors elect to re-enroll through their financial representatives.
Despite the elevated withdrawal requests, HLEND reported continued portfolio performance and substantial liquidity.
Since launching four years ago, the fund has generated a 10.7% annualized total net return and ranked first among peers in three-year total return as of Dec. 31, 2025, according to investment banking firm Robert A. Stanger & Company Inc.
Ninety-six percent of the portfolio consists of first-lien senior secured debt with a weighted average loan-to-value ratio of 39%.
As of Feb. 28, 2026, the fund reported more than $4.4 billion in available liquidity and said it had raised approximately $840 million in new subscriptions during the first quarter of 2026.
The shareholder letter said portfolio companies recorded 15% growth in earnings before interest, taxes, depreciation and amortization over the past year, which the fund cited as evidence of continued underlying performance.
HLEND also pointed to what it described as increasing opportunities in private credit markets during periods of uncertainty and volatility. “We believe we are entering that type of environment,” the letter stated.
BlackRock Inc. (NYSE: BLK), which completed its acquisition of HPS Investment Partners in July 2025, saw its shares fall nearly 7% in afternoon trading Friday following the announcement.
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