BlackRock, the world's largest asset manager, has announced a $12 billion acquisition of private credit manager HPS Investment Partners. The deal, expected to close by mid-2025 pending regulatory approvals, will significantly bolster BlackRock's presence in the booming private credit market.
In a statement on Tuesday, BlackRock CEO Larry Fink emphasized the strategic importance of the acquisition. "We have always sought to position ourselves ahead of our clients' needs. Together with the scale, capabilities, and expertise of the HPS team, BlackRock will deliver clients solutions that seamlessly blend public and private [markets]," he said.
The transaction will result in an integrated private credit franchise managing approximately $220 billion in assets. HPS currently oversees $148 billion, while BlackRock, which manages $11.5 trillion in total assets, continues its expansion into alternative investments.
The deal is structured with a mix of stock payments, including deferred payments over five years. It also includes up to $675 million in employee retention incentives. Additionally, the total shares issued could increase by 13% if HPS meets specific financial performance milestones.
The move underscores BlackRock's ambitions to capitalize on the burgeoning private credit market. Publicly traded peers in the sector, such as Blue Owl Capital and Ares Management, have posted robust gains of 54.6% and 46% respectively in 2024, outpacing BlackRock's 25.7% year-to-date gain.
HPS co-founders Scott Kapnick, Scot French, and Michael Patterson will remain with the firm and join BlackRock's global executive committee. They will lead a newly established private financing solutions group, signaling BlackRock's commitment to integrating HPS into its broader operations.
Sources indicate that HPS initially explored going public, a move that caught BlackRock's attention as it sought to strengthen its alternative assets division. This acquisition follows BlackRock's recent high-profile deals, including a $12.5 billion purchase of Global Infrastructure Partners and a $3.2 billion acquisition of private markets data provider Preqin.
