BlackRock’s Larry Fink Says Institutional Investors Are Pouring Into Private Credit Amid Retail Pullback

• Fink highlighted a multibillion-dollar allocation from an insurance client into high-grade private credit during the quarter, adding that similar deals are in the pipeline.
• He added that the long-term demand for institutional-grade private credit is intact.
• BlackRock’s Q1 revenue came above Wall Street’s estimates at $6,7 billion, even as earnings of  $11.53 per share fell short of consensus estimates.

BlackRock Inc. (BLK) CEO Larry Fink said institutional demand for private credit is accelerating, even as retail investors pull back from the asset class amid rising concerns over risk and liquidity.

“If anything, with some of the retail pullback, we’ve seen stronger institutional fundraising, stronger institutional deployment. Some of the spreads that we see today in direct lending and asset-based finance are some of the most attractive on this market pullback,” Fink said on a call with analysts after BlackRock reported its first-quarter (Q1) results.

He also noted that market headlines do not reflect what clients and portfolio data indicate.

“There’s been a lot of attention on private credit, but the headlines do not reflect what clients are telling us, what our portfolio data shows, or where we see the market going. Demand is structural. Private credit serves an important role in the financing ecosystems,” Fink told analysts.

BLK shares gained 3% on Tuesday.

Multi-Billion-Dollar Private Credit Allocation From Insurance Client Adds To Bullish Sentiment

Fink highlighted a multibillion-dollar allocation from an insurance client into high-grade private credit during the quarter, adding that similar deals are in the pipeline. Institutional investors, particularly insurers, continue to increase exposure.

“We do see long-term demand for institutional-grade private credit as intact,” he added.

The comments come as retail investors redeem funds at record levels, prompting some asset managers to impose withdrawal limits. Concerns over AI-related risks have further pressured the sector, driving redemptions higher and pushing listed funds below their net asset value.

Blue Owl, which recently revealed higher-than-usual redemption requests in its OCIC and OTIC private credit funds, has declined more than 40% so far this year.

In March, BlackRock limited withdrawals from its $26 billion HPS Corporate Lending Fund after a surge in redemption requests. The fund saw about $1.2 billion in withdrawals in the first quarter, or roughly 9.3% of its net asset value.

Q1 Results Snapshot

BlackRock’s Q1 revenue jumped 26% to $6.7 billion, above Wall Street’s estimates of $6.4 billion, according to Fiscal.ai data. However, its earnings of $11.53 per share fell short of consensus estimates of $11.65.

It recorded a quarterly net inflow of $130 billion, led by a record Q1 for iShares ETFs, alongside net inflows in active and private markets.

“iShares posted record first-quarter net inflows of $132 billion and doubled net new base fees compared to a year ago, as clients rotated to our international and precision exposures. Active equity is a growth area at BlackRock, driving $3 billion of net inflows. Private markets net inflows of $9 billion were led by private credit and infrastructure, where we have strong fundraising and deployment momentum,” Fink added.

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