Episode summary
BlackRock’s $26 Billion Private Credit Fund Limits Withdrawls | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Kristine Aquino · Guests: Brian Chappatta, Dan Ives, Lauren Hochfelder
Summary
BlackRock’s decision to curb withdrawals from its $26 billion HPS Corporate Lending Fund set the tone for a discussion of whether private credit is facing a liquidity problem or something more systemic. The host and a Bloomberg News analyst said the fund saw 9.3% withdrawal requests, above the 5% level at which it can limit redemptions, and noted that the move reflects how illiquid private credit can be when investors want cash back quickly. The analyst argued that the immediate issue is more a liquidity mismatch than a broad credit crisis, though forced selling could still pressure prices and returns if redemptions persist.
The conversation then shifted to technology, where a guest said the market is dealing with an “AI ghost trade,” Anthropic worries, and renewed caution after the Iran conflict. He argued that fears about AI replacing software are overstated, especially in cybersecurity, and said long-term capital spending in tech should keep rising. The final segment was more upbeat on commercial real estate: a Morgan Stanley executive said the worst is behind the sector, that lending has reopened, and that lower financing costs, reduced new supply, and a 20% global valuation drawdown make the asset class look attractive.
Key takeaways
- BlackRock’s HPS Corporate Lending Fund capped redemptions at 5% after investors requested 9.3% withdrawals, a sign of stress in private credit liquidity.
- The Bloomberg News analyst said the issue looks like a liquidity mismatch for now, but forced selling could create a negative feedback loop if redemptions continue.
- The tech guest called the AI “ghost trade” a “fictional tale” and said cybersecurity, Microsoft, Salesforce, ServiceNow, and Palantir remain core winners.
- The guest said the Iran conflict has added volatility, but expects capex and military technology demand to keep supporting the sector.
- Morgan Stanley’s real estate executive said the worst is behind the property market and highlighted lower borrowing costs, rising lending, and attractive entry points.
- She said office is still bifurcated, with top-quality assets holding up while lower-quality buildings are more likely to convert or clear at lower prices.
Notable quotes
“black rockck today. Black rockck curbed withdrawals from its HPS corporate lending fund after client requests for redemption spiked”
“right now it's kind of a liquidity problem, right? Um there's a mismatch, I think, between maybe some of the retail investors”
“I mean the AI ghost trade, it goes back to like the anthropic worries that's crushed software this year”
“I absolutely think the worst is behind us. I think we talked the last time we were together that it felt like a bottom was forming”
How the episode opens
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Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. One of the undercurrens out there in the marketplace is credit quality particularly in the private credit business.
We've been reading stories over the last several weeks and months uh including blue owl for example and there's another uh about some credit uh tightness there and some uh concerns there. Then black rockck today. Black rockck curbed withdrawals from its HPS corporate lending fund after client requests for redemption spiked.
I wasn't expecting Black Rockck. That's just such a high quality name. I was not expecting to see the Black Rock come into this conversation.
Uh but let's get the latest reporting there. Brian Chapata joins us, managing editor of leverage finance and distress debt uh for Bloomberg News. Brian, talk to us about what's happening in the private credit market here today.
Are these cockroaches as Jamie Diamonds suggests or is this something now maybe a little bit more systematic or systemic?
Well, you know, I think you talked about uh at the jump you weren't expecting necessarily Black Rockck and you know, one of the big things that Black Rockck has been pushing into is private markets and is private credit. So this HPS fund is one of the major funds that it acquired as part of its acquisition last year of HPS investment partners. So what you were seeing here in this fund is 9.3% withdrawal requests and they have in stated in their language as many of these private credit funds do we if we we you know reserve the right to halt redemptions at 5% if they become too overwhelming for us because we can't really sell our assets.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private credit fund withdrawals
- tech sector outlook
- ai investment concerns
- u.s. real estate market
- fedirect redemptions and liquidity
Companies and tickers mentioned
- BLK
- MS
- BlackRock
- Wedbush Securities
- Morgan Stanley
- Anthropic
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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