Fwd from @. BlackRock in trouble

Fwd from @

BlackRock in trouble

Reason for everyone to worry

BlackRock — the world's largest asset manager ($10 trillion) has restricted withdrawals from its flagship debt fund HLEND worth $26 billion. This is due to an avalanche of redemption requests from investors who sensed something was wrong and want to pull their money out. As a result, the company's stock has plummeted by more than 7% in just a few days.

️And this is not the only case. Blackstone, BlackRock's competitor, was forced to raise the withdrawal limit from its $82-billion fund from 5% to 7%, and the company itself urgently invested $400 million to satisfy all requests. Blue Owl in January even bought back 15.4% of one of its funds.

The private lending industry has been growing like wildfire for several years, especially in the "affluent retail" segment. They sold an understandable narrative — higher returns than bonds and less stress than stocks. But the structure inside is fragile: funds hold illiquid loans to companies that cannot be quickly sold, while investors want to withdraw their money now. In calm times this is not visible, but in times of "stress" — a classic "bank run" begins.

There are plenty of reasons to be concerned

▪️Bankruptcies of an American auto parts supplier and subprime auto lender last year.

▪️Collapse of a British mortgage lender last week.

▪️General turmoil in financial markets due to the Middle East war.

The thing is, BlackRock is one of the largest shareholders in most corporations in the world — from Apple and Microsoft to oil giants and banks. When BlackRock starts having liquidity problems, it's a warning signal for the entire financial system.

Right now markets are being shaken from several directions at once: the protracted Middle East war is weighing on the economy and driving investors to "safe havens," the AI revolution is destroying entire sectors, and rising credit defaults threaten to hit fund returns and scare away new investors.

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