BlackRock, the world’s largest asset manager, has agreed to acquire HPS Investment Partners for US$12bn 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 firm’s offerings beyond traditional equities and bonds.
HPS, a New York-based private credit manager overseeing US$148bn in client assets, specialises in providing tailored financing solutions to businesses, including high-yield loans and asset-based finance. The deal will integrate HPS’s operations with BlackRock’s existing private credit division, creating a combined platform managing approximately US$220bn in assets.
“We have always sought to position ourselves ahead of our clients’ needs,” said Fink. “Together with the scale, capabilities, and expertise of the HPS team, BlackRock will deliver solutions that seamlessly blend public and private markets.”
Expanding alternatives
This transaction is the latest in a series of moves by BlackRock to strengthen its position in alternative assets. Earlier this year, the company completed a US$12.5bn acquisition of Global Infrastructure Partners and a US$3.2bn deal for private market data provider Preqin.
Following the HPS acquisition, BlackRock’s alternative assets under management will approach US$600bn, enhancing its competition with peers like KKR, Blackstone, and Apollo Global Management.
HPS CEO Scott Kapnick and co-founders Scot French and Michael Patterson will lead the new private financing solutions unit and join BlackRock’s executive committee.
Kapnick described the deal as a “milestone in our drive to become the world’s leading provider of private financing solutions.”
Market context
Private credit has emerged as a booming sector, with the market projected to more than double to US$4.5tn by 2030, according to BlackRock. Insurers and pension funds are increasingly attracted to the sector for its higher yields compared to traditional debt instruments. HPS’s expertise will enable BlackRock to serve clients seeking long-term investment solutions.
The transaction, expected to close in mid-2025, involves issuing up to 13.7 million BlackRock shares, with 9.2 million units to be exchanged at closing and additional shares contingent on HPS meeting performance targets. BlackRock also plans to assume or refinance US$400m in HPS debt as part of the deal.
Shares in BlackRock are currently down 0.28% at US$54.33. Year to date, they’re 104.06% higher.