SynopsisBlackRock's flagship private credit fund saw lower redemption requests in the third quarter, signalling that pressure in the sector may be easing. Withdrawal requests at other BlackRock funds also declined, while analysts said improving sentiment and a clearing redemption backlog could support private credit firms and asset managers.

comBlackRock private credit redemptions ease in third quarter. Redemption pressure in private credit may be starting to ease, with BlackRock's flagship fund receiving fewer withdrawal requests in the third quarter than in the previous three months.

The development offers an early sign that investor concerns around the asset class could be moderating after a year of heavy withdrawal demand. 3% in the previous quarter, according to a regulatory filing on Friday cited by Reuters.

The fund will repurchase 5% of shares, in line with the customary threshold for such vehicles. Redemption pressure starts to easeThe decline comes after wealthy investors pulled back from non-traded private credit funds amid concerns over lending standards and the potential impact of artificial intelligence on software companies, which form an important part of the borrower base for direct lenders.

However, the latest figures suggest the redemption backlog may be beginning to clear as asset managers work through earlier withdrawal requests." The redemption backlog is now clearing.

This is another encouraging data point on direct lending sentiment in the wealth channel, and we expect redemption trajectory for the BDC group (business development company) to decelerate," Evercore analyst Glenn Schorr said, according to Reuters." Overall, we expect BLK to trade positively today on the back of this release," Schorr said.

The easing was not limited to BlackRock's flagship fund. 7%, Reuters reported.

Private credit funds face investor scrutinyThe latest figures come as investors continue to assess the resilience of private credit portfolios and the ability of funds to meet redemption demands. 7 billion of shares across three repurchase periods that ended June 30.

Its latest tender offer involved about $600 million. The fund said the performance of its underlying portfolio companies remained strong and that its portfolio was highly diversified.

9% annualised total net return through July 31, according to the information provided in the filing. 5% premium to total returns from broadly syndicated loans.