The Asset Manager Whose Private Credit Fund Just Capped Withdrawals. Should BlackRock Investors Worry?

BlackRock (NYSE: BLK) is one of the world's largest asset managers, with $13.9 trillion of assets under management. It offers a wide variety of products and services, so no single product is likely to have a huge impact on the overall business. That said, the company's $26 billion HPS Corporate Lending Fund just did something that investors should keep a close eye on.

Private credit in the spotlight

HPS Corporate Lending Fund is a non-traded business development company (BDC) run by BlackRock. It basically makes loans to smaller companies that lack access to other forms of capital. There are publicly traded BDCs you can buy, with the big draw being yields that can reach 10% or even more. That yield, however, comes with the risk that smaller companies often struggle to make interest payments during recessions and industry-specific downturns.

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There have been concerns among investors that risks in private credit are rising. This has led BlackRock's customers to withdraw money from HPS Corporate Lending Fund. Because it is not publicly traded, BlackRock serves as the gatekeeper for withdrawals from the fund. It just capped withdrawals at 5%. The company's customers wanted to pull more out.

There's an important mismatch here. The loans made by the HPS Corporate Lending Fund are longer-term, while the fund's investors are trying to pull cash out in the short term. Too many customers selling at once could force BlackRock to sell assets at an inopportune time. That, in turn, could turn into a downward spiral as fearful investors rush for the exits amid weak performance driven by withdrawal-forced portfolio asset sales. The withdrawal cap is a worrying sign that investors are preparing to rush for the exits.

BlackRock isn't alone

While it isn't yet a contagion, HPS Corporate Lending Fund isn't the only fund that has chosen to limit withdrawals. Blue Owl Capital (NYSE: OWL) has done the same thing with funds, too. Investors should be increasingly worried that private credit investors are growing more fickle, as this could spark a wider panic across the private credit and public BDC spaces.

That said, BlackRock still saw $9 billion in inflows to its private credit business in the first quarter of 2026. And while it manages over $300 billion in private credit assets, that is still only a small portion of its $13.9 trillion in total assets. It is highly unlikely that troubles in the private credit business will derail BlackRock's long-term performance, even if fee-related income takes a short-term hit.

Take this news with a grain of salt

HPS Corporate Lending Fund's withdrawal limits could be a canary-in-the-coalmine situation for private credit more broadly. So investors shouldn't ignore what is going on, since fear can lead investors to make rash, lemming-like decisions. But, at the same time, BlackRock is a large and diversified finance company, so shareholders probably shouldn't be overly worried, either.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends BlackRock. The Motley Fool has a disclosure policy.