Beware of the get-rich-quick schemes engineered by Wall Street, especially the move to private credit, where liquidity can be easier said than done. BlackRock has announced that investors in its flagship private-credit funds will face withdrawal limits for the first time.

BlackRock’s HPS Corporate Lending Fund, which, according to the company’s website, “seeks to generate attractive risk-adjusted returns, predominantly in the form of current income, by curating a diversified portfolio of high-quality senior secured, privately originated loans to established companies,” has reportedly limited withdrawals to 5% of the fund’s assets.

Investors signed up for this; it’s all in the fund’s paperwork. But the limit, spurred by heightened withdrawals from the fund, may leave some investors upset that they can’t access their money. The Wall Street Journal reports:

The decision mattered this quarter because the fund, known by its ticker, Hlend, had received requests to redeem 9.3% of its shares, according to a letter BlackRock—which is helmed by Chief Executive Larry Fink—sent to investors on Friday. In the fund’s four-year history, it was the first quarter in which withdrawal requests exceeded 5%.

Bloomberg worries that the move could create bad press for the private credit industry at the same time it wants a piece of the 401(k) market. Bloomberg reports:

For an industry that has ballooned to $1.8 trillion — and is on the cusp of prying open America’s 401(k)s and other retirement accounts — it was an uncomfortable step. It risks generating a backlash from retail investors who are growing increasingly anxious to access their money and, in so doing, reinforces the dangers long expressed by industry skeptics of selling illiquid assets to a twitchy customer base.

Action Line: With private equity the next big thing coming for you, be careful. If your 401(k) is filled with choices you don’t like, and you need help with an IRA Rollover, email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my free monthly Survive & Thrive letter.

Read the entire series here.

Originally posted on Your Survival Guy.