<div id="readability-page-1"><div><div><p>Written by: jsai@Jinse Finance</p><p>In March 2026, in a corner unseen by the US-Iran war, the US private lending market suddenly faced a peak in redemption pressure.</p><p>BlackRock's flagship fund, the HPS Corporate Lending Fund (HLEND), with $26 billion in assets under management, announced that it would strictly limit quarterly redemptions to 5%, despite investor redemption requests reaching 9.3% (approximately $1.2 billion in requests, with only about $620 million approved).</p><p>This is not an isolated case; funds under leading institutions such as Blackstone, Blue Owl, Cliffwater, and Morgan Stanley have also faced similar predicaments.</p><h2>I. Which funds have already implemented redemption restrictions?</h2><p>Currently, it has not reached the point of a &#34;general&#34; industry-wide mandatory shutdown of redemptions, but the pressure is highly concentrated on &#34;semi-open&#34; or interval funds (BDC) targeting retail and high-net-worth clients.</p><p> These funds typically offer a redemption window of up to 5% of net asset value each quarter. If applications exceed this limit, the manager can legally initiate a restriction mechanism. Funds known to have begun restricting redemptions include: BlackRock HPS Corporate Lending Fund (HLEND, $26 billion): Applications in Q1 2026 were 9.3%, strictly limited to 5%, triggering the &#34;structural cap&#34; for the first time. This is also the first large institution to explicitly restrict perpetual private lending products since the recent market turmoil. Blackstone BCRED (approximately $82 billion): Applications reached a record 7.9%, exceeding the usual 5% cap. The company used approximately $400 million of its own funds and those of its executives to fully meet redemptions, without officially &#34;closing the gate,&#34; but demonstrating significant buffering pressure. Blue Owl Capital's OBDC II and other BDCs ($1.6-1.9 billion): Starting in February, regular quarterly redemptions ceased, replaced by periodic distributions (loan repayments or asset sales), effectively a restriction. Previously, it had repurchased 15.4% of its holdings, and the stress test revealed its first cracks. Cliffwater Corporate Lending Fund ($33 billion): Facing redemption requests exceeding 7%, the window just closed on Tuesday (March 10th), and the company has not yet decided whether to limit it to 5% or increase it to 7%. Morgan Stanley North Haven Private Income Fund ($8 billion): With requests around 11%, North Haven returned approximately $169 million after setting a 5% redemption cap, less than half of the investor redemption requests. Other funds such as Ares and Fidelity have also seen increased redemption rates, but have not yet officially imposed restrictions. Overall, in the $1.8-2 trillion private lending market, retail-oriented funds are the hardest hit, while institutional funds are relatively stable, but the risk of confidence spillover has already emerged. </p><h2>II. Why Restrict Redemptions: The Root Cause Lies in Structural Mismatch and Market Concerns</h2><p>The core selling point of private lending is &#34;high returns + low volatility + quarterly liquidity,&#34; but the underlying assets are long-term, non-public, and difficult-to-liquidate corporate loans (especially SaaS, technology LBOs, etc.).</p><p><span>Although many funds have explicitly stipulated a redemption window of up to 5% of net asset value, restricting redemptions is compliant and legal</span>, when a wave of redemptions hits, funds face the shattering of their &#34;liquidity illusion.&#34;</p><p>Factors triggering the redemption wave include: AI Impact: Many funds heavily invest in software company mortgage loans; generative AI could destroy their business models, leading to valuation downgrades. JPMorgan Chase has already downgraded the valuation of some software mortgage loans and tightened lending. Duration Mismatch: Investors can exit their funds quarterly, but loan terms are often several years. If excess redemptions are fully met, managers can only sell assets at a loss or increase leverage, harming the interests of remaining investors. BlackRock explicitly stated that &#34;without the 5% cap, there will be a structural mismatch between investor capital and private credit loans.&#34; Loan Quality Concerns: The default rate has risen to 9.2% in 2025 (Fitch data). High-profile defaults (such as the UK's MFS fraud bankruptcy, with risk exposure exceeding £2 billion) exacerbate panic. Retail investor runs: In the past few years, retail investors' entry into the market has driven up its size. Now, with the Fed's interest rate cuts, the impact of AI, and macroeconomic uncertainty, retail investors are the first to withdraw, creating a &#34;first come, first served&#34; dilemma. When faced with a wave of redemptions, fund managers also face a dilemma. Fully satisfying redemptions would damage their reputation and long-term discipline; strict restrictions could trigger more panic redemptions. Blackstone chose to &#34;pay out of its own pocket&#34; to buffer the losses, BlackRock adhered to the terms, and Cliffwater is still weighing its options. III. Impact on financial markets: Systemic risks are emerging, similar to the eve of 2007? Private lending has become the core of &#34;shadow banking,&#34; approaching $2 trillion in size. If a liquidity crisis spreads, it will have the following impacts: Asset management giants' stock prices plummet: BlackRock's stock price fell more than 7% after its announcement, and alternative asset management firms such as Blackstone, KKR, and Ares are collectively under pressure, marking their worst performance in a decade this year. Asset sell-offs and deleveraging: If more funds are forced to sell loans at bargain prices, it will depress valuations in the public bond market, and banks will tighten leverage financing for private lending (JPMorgan Chase has already taken action). Confidence crisis spillover: The collapse of retail investor confidence may affect the entire alternative asset class, leading to increased discounted trading in the secondary market. Analysts have likened this to the &#34;canary moment&#34; of the 2007 subprime crisis—an early sign of liquidity depletion and valuation opacity. In the short term, managers can avoid an immediate collapse by using their own funds or selling assets as a buffer; however, if the default rate continues to rise or the economy slows down, systemic risks will be amplified. IV. Impact on the Crypto Market: Indirect Transmission Predominates, RWA Becomes a Key Channel The direct impact of the private lending crisis on the crypto market is limited, but there are two spillover paths: Macroeconomic Risk Aversion and Deleveraging: Private lending deleveraging may trigger a wider sell-off of risky assets, with high-beta assets such as Bitcoin bearing the brunt. Historical experience shows that traditional financial liquidity tightening is often accompanied by a crypto &#34;de-risking&#34; market. RWA and On-Chain Transmission in DeFi: The current on-chain private lending scale is close to $5 billion, mainly entering DeFi in the form of tokenized lending. If the underlying traditional loans are impaired or defaulted, fluctuations in RWA net worth will trigger DeFi liquidations and liquidity tightening. Analysts warn that this could be transmitted to the crypto ecosystem through two channels: &#34;macro deleveraging + tokenized credit products.&#34; However, overall, the crypto market is more affected by &#34;emotional contagion&#34; than by direct asset linkages. Short-term volatility may increase, but long-term performance depends on Federal Reserve policy and the actual implementation of AI economy. This also serves as a warning that the crypto market must pay close attention to the underlying assets of RWA during the process of putting real-world assets (RWA) on-chain. Once the underlying assets encounter problems, the so-called RWA tokenization and DeFi will be castles in the air. Conclusion: Beware of &#34;liquidity illusion,&#34; private lending enters a stress test period. This wave of redemptions is not the end of private lending, but rather its first real liquidity test after rapid expansion. While the adherence to caps by giants like BlackRock has protected funds in the short term, it tests investor trust in the long run. Financial markets need to pay attention to subsequent quarterly reports (more funds will disclose their results in March and April), while the crypto market should closely monitor RWA default signals and macro liquidity. For investors, it is advisable to carefully assess their own liquidity needs and avoid chasing the &#34;high-yield illusion.&#34; Regulators may strengthen retail access scrutiny to prevent excessive risk transfer to retail investors. Whether this crisis is a &#34;canary in the coal mine&#34; or a &#34;temporary pain&#34; will be answered by data in 3-6 months. Markets always seek balance amidst volatility—the next chapter in private lending may well be a more transparent and sustainable one.</p></div></div></div>

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<p>In March 2026, the US private lending market faced significant redemption pressures, with major funds like BlackRock's HPS Corporate Lending Fund limiting redemptions to 5% despite requests exceeding 9%. Other funds, including those from Blackstone and Morgan Stanley, also experienced similar issues. The wave of redemptions is attributed to structural mismatches, market concerns, and rising default rates. This situation raises systemic risks in the financial markets, reminiscent of the pre-2007 crisis, as private lending approaches $2 trillion in size, potentially impacting asset management firms' stock prices.</p>

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How will the wave of redemptions from private credit funds affect the financial and crypto markets?