BlackRock paused fundraising for latest Asia private credit fund

BlackRock was targeting to raise about $1 billion for the third Asia-Pacific private credit fund, and fundraising had started in the fourth quarter of 2023

BlackRock Inc. paused fundraising earlier this year for its latest Asian private credit strategy amid its merger with HPS Investment Partners, people familiar with the matter said, adding to uncertainties for the firm’s ambitions for the asset class in the region.

Fundraising for the firm’s third Asia-Pacific private credit fund came to a standstill earlier in 2025 following the announcement in December that BlackRock was buying private credit firm HPS, according to the people, who asked not to be identified discussing private matters. The New York-based firm completed its acquisition of HPS on July 1.

The pause adds to recent challenges. A key investor in BlackRock’s private funds, Arch Capital Group, is in talks to sell at least $350 million of certain stakes following disappointing performance in some of them and a series of senior departures, Bloomberg News reported last month. Moreover, BlackRock Asia-Pacific Private Credit Opp. Fund II had only secured less than half of its $1 billion target.

Meanwhile, BlackRock and Abu Dhabi state-owned wealth fund Mubadala Investment Co. mutually agreed to unwind their private credit partnership due to difficulty in sourcing deals, other people familiar with the matter said in June.

BlackRock’s woes in Asia underscore the ongoing challenges facing the global $1.7 trillion private credit market. Fundraising for the asset class has slowed this year to $70 billion in the period through July 22, accounting for just a tenth of the alternative asset inflows, according to JPMorgan Chase & Co., the smallest share since at least 2015. Private credit funds also have had to contend with a prolonged deal drought and the impact of US tariffs.

Default rates for private credit deals are at 5.4%, when non-accrual loans — those on which lenders expect to book losses — are included, according to JPMorgan. This puts private credit default rates broadly in line with the syndicated loan market, and is raising alarm bells for some in Wall Street about under-appreciated risks in the asset class.

BlackRock was targeting to raise about $1 billion for the third Asia-Pacific private credit fund, and fundraising had started in the fourth quarter of 2023, the people said. Internal discussions with HPS executives on how to proceed are poised to take place but it’s unclear when, they added. BlackRock declined to comment.

BlackRock’s merger with HPS came as part of a larger push by its co-founder, Larry Fink, to cement the firm’s future in private markets. The asset manager also recently set its first-ever firmwide target for private market fundraising at $400 billion by 2030.