HPS Corporate Lending Fund (HLEND) Investor Losses
The board of trustees of HPS Corporate Lending Fund, a perpetual-life non-traded business development company sponsored by HPS Investment Partners, has unanimously recommended that shareholders reject an unsolicited mini-tender offer from Cox Capital Retail Secondaries Fund I, L.P., priced roughly 25% below the fund’s net asset value. The rejection comes as the fund’s shareholder redemption requests have climbed well above its quarterly repurchase cap. The White Law Group is investigating potential FINRA arbitration claims on behalf of investors who may have been sold HPS Corporate Lending Fund without adequate disclosure of its risks.
Board Rejects Below-NAV Tender Offer
Cox Capital is offering to buy up to 550,000 Class I shares of HPS Corporate Lending Fund at $18.40 per share, roughly 25% below the fund’s net asset value of $24.53 per share as of May 31, 2026. The shares subject to the offer represent approximately 0.1% of the fund’s outstanding Class I shares.
The board’s stated reasoning is that shareholders already have access to liquidity through the fund’s quarterly repurchase program, where shares are redeemed at NAV, and that Cox Capital’s offer would effectively transfer value from tendering shareholders to Cox Capital’s own fund investors, as well as to Cox Capital itself through performance-based fees. Shareholders who do not wish to tender do not need to take any action, and those who have already agreed to tender may withdraw before the offer expires.
According to trade publication AltsWire, this is part of a broader pattern this year in which Cox Capital and, in some cases, Saba Capital Management have launched unsolicited below-NAV tender offers across the non-traded BDC and REIT sector, including a similar offer for Ares Strategic Income Fund that its board also rejected.
Redemption Requests Climb Sharply
AltsWire also reported that HPS Corporate Lending Fund’s second-quarter 2026 repurchase requests rose to approximately 13.3% of shares outstanding, well above the fund’s 5% quarterly repurchase cap, and up from 9.3% in the first quarter. When redemption requests consistently exceed the cap, investors may be forced to wait multiple quarters to fully exit their position, which The White Law Group considers a significant factor for investors evaluating potential losses.
Per the fund’s own disclosures, as of June 30, 2026, net asset value per share stood at $24.42 across all share classes, with aggregate NAV of $12.05 billion, portfolio fair value of $24.18 billion, and principal debt outstanding of $12.24 billion — a debt-to-equity ratio of approximately 0.97x. The fund declared July distributions of $0.199 per share for Class I shares (a $0.16 regular distribution plus a $0.039 variable supplemental distribution), payable on or about August 31, 2026, to shareholders of record as of July 31, 2026. HPS Corporate Lending Fund continues to offer up to $15 billion in shares on a continuous basis and, as of July 1, 2026, had issued approximately 560.7 million shares for total consideration of about $14.08 billion. The fund is advised by HPS Investment Partners, which BlackRock acquired in July 2025 in an all-stock deal valued at approximately $12 billion.
What Is HPS Corporate Lending Fund?
HPS Corporate Lending Fund is a business development company, or BDC, which operates much like a non-traded real estate investment trust (REIT). BDCs pool investor money and deploy that capital into loans and investments in small and medium-sized businesses, with the goal of supporting growth in those underlying companies. When those businesses perform well, a BDC can be a strong investment, and certain BDCs also offer a favorable tax structure for investors.
Understanding the Risks of Non-Traded BDCs
However, the “middle-market loans” that make up much of HPS Corporate Lending Fund’s portfolio are largely highly leveraged loans to private-equity-backed companies, and they carry significant credit risk. When rising interest rates, inflation, or a recessionary environment put pressure on those underlying borrowers, BDCs like HPS Corporate Lending Fund may suffer significant losses. The fund’s non-traded structure and capped quarterly redemption program can also make it difficult for investors to access their money when they need it, as this year’s elevated redemption requests illustrate.
Potential Lawsuits to Recover Investment Losses
The White Law Group continues to investigate potential claims against broker dealers that allegedly sold high-risk, illiquid investments like HPS Corporate Lending Fund to investors for whom they were unsuitable. The high commission structure attached to many non-traded BDCs and REITs creates an incentive for unscrupulous financial advisors to push these products for their own benefit rather than the investor’s.
Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that recommendations are suitable in light of an investor’s age, risk tolerance, net worth, and investment experience. Broker dealers that fail to adequately disclose risks or that make unsuitable recommendations can be held liable for investment losses through a FINRA arbitration claim.
Frequently Asked Questions
What is a mini-tender offer, and why did the board recommend rejecting it?
A mini-tender offer is an offer to buy less than 5% of a company’s outstanding shares, which allows the buyer to bypass many of the disclosure and procedural protections that apply to larger tender offers. Cox Capital’s offer priced shares roughly 25% below HPS Corporate Lending Fund’s published NAV, and the board concluded shareholders already have a NAV-based liquidity option through the fund’s quarterly repurchase program.
Why do rising redemption requests matter to HPS Corporate Lending Fund investors?
The fund caps quarterly repurchases at 5% of outstanding shares. With second-quarter 2026 requests reportedly reaching approximately 13.3%, investors seeking to redeem may only receive a prorated portion of their request, extending the time it takes to fully exit the investment.
What can I do if my broker recommended HPS Corporate Lending Fund without disclosing its risks?
If you were not informed about the fund’s illiquidity, leverage, or credit risk before investing, you may be able to pursue a claim against the broker dealer or financial advisor who made the recommendation. The White Law Group offers a free, no-obligation consultation to discuss your options.
Free Consultation
If you have suffered losses in HPS Corporate Lending Fund and would like to speak with a securities attorney about recovering those losses, call The White Law Group at (888) 637-5510 for a free consultation, or visit our contact page. You can also learn more about pursuing a FINRA arbitration claim with our firm.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois, and Seattle, Washington.
