BlackRock, the world’s largest asset manager, has agreed to acquire HPS Investment Partners for $12 billion in an all-stock deal, accelerating its expansion into private credit markets. The acquisition, announced Tuesday, highlights CEO Larry Fink’s strategy to diversify the company’s offerings beyond traditional stocks and bonds.
HPS, a New York-based private credit manager overseeing $148 billion in client assets, specializes in providing tailored financing solutions to businesses, including high-yield loans and asset-based financing . The deal will integrate HPS’s operations with BlackRock’s existing private credit division, creating a combined platform managing approximately $220 billion in assets.
“We have always sought to position ourselves ahead of our customers’ needs,” Fink said. “With the scale, capabilities and expertise of the HPS team, BlackRock will deliver solutions that seamlessly blend public and private markets. »
Expansion of alternatives
The transaction is the latest in a series of moves by BlackRock to strengthen its position in alternative assets. Earlier this year, the company completed the $12.5 billion acquisition of Global Infrastructure Partners and a $3.2 billion deal for private market data provider Preqin.
Following the HPS acquisition, BlackRock’s alternative assets under management will approach US$600 billion, strengthening its competition with peers such as KKR, Blackstone and Apollo Global Management.
HPS CEO Scott Kapnick and co-founders Scot French and Michael Patterson will lead the new private finance solutions unit and join BlackRock’s executive committee.
Kapnick described the deal as “an important step in our drive to become the world’s leading provider of private financing solutions.”
Market context
Private credit has become a booming industry, with the market expected to more than double to $4.5 billion by 2030, according to BlackRock. Insurers and pension funds are increasingly attracted to the sector due to its higher returns than traditional debt instruments. HPS’ expertise will enable BlackRock to serve clients seeking long-term investment solutions.
The transaction, which is expected to close in mid-2025, involves the issuance of up to 13.7 million BlackRock shares, of which 9.2 million units will be exchanged at closing and additional shares subject to HPS reaching its performance objectives. BlackRock also plans to assume or refinance $400 million of HPS debt as part of the deal.
Shares of BlackRock are currently down 0.28% at US$54.33. Since the start of the year, they are up 104.06%.
