BlackRock acquires HPS Investment Partners for $12bn

HPS is a global credit investment manager with approximately $148bn in client assets; BlackRock expects the private debt market to more than double to $4.5tn by 2030.

December 04, 2024

BlackRock is acquiring 100% of HPS Investment Partners for around $12 billion.

HPS is a global credit investment manager with approximately $148 billion in client assets. In addition to seven offices in the US, it has offices in London, Luxembourg, Munich, Dubai, Hong Kong, Singapore and Sydney, according to HPS’s website.

The equity is issued by a wholly-owned subsidiary of BlackRock (SubCo Units), and exchangeable on a one-for-one basis into BlackRock common stock.

According to a media release, the combined private credit franchise will work with BlackRock’s $3 trillion public fixed income business to provide both public and private income solutions for clients across their whole portfolios.

The aim is for HPS to help BlackRock connect with small and medium-sized businesses, in addition to large corporations, with financing for investments that support economic growth and job creation.

BlackRock expects the private debt market will more than double to $4.5 trillion by 2030. The firm believes that the "duration, returns, and yield characteristics of private credit match the needs of clients with long-dated capital, including insurance companies, pensions, sovereign wealth funds, wealth managers, and investors saving for retirement."

HPS, launched in 2007, is led by its founders and long-term governing partners Scott Kapnick, Michael Patterson, Scot French, Purnima Puri, Faith Rosenfeld, Paul Knollmeyer, and Kathy Choi.

BlackRock and HPS will form a new private financing solutions business unit led by Kapnick, French, and Patterson. This platform will operate across senior and junior credit, asset-based finance, real estate, private placements, and collateralised loan obligations (CLOs). It will also offer direct lending, fund finance, and BlackRock’s general partner (GP) and limited partner (LP) solutions (for example, fund of funds, GP/LP secondaries, co-investments).

As part of this transaction, Kapnick, French, and Patterson will join BlackRock’s global executive committee and Kapnick will be an observer to the BlackRock board of directors.

“I’m excited by what HPS and BlackRock can do together for our clients and look forward to welcoming Scott Kapnick, Scot French, and Michael Patterson, along with the entire HPS team, to BlackRock. 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,” said Laurence D. Fink, BlackRock chairman and chief executive officer.

Kapnick added: “Our partnership with BlackRock will further strengthen our position in this fast growing but increasingly competitive market. The combination of HPS’s proven culture of investment discipline with BlackRock’s global reach will allow us to seize new opportunities for our investors and employees and set us up for continued success for the next decade and beyond. My partners and I are energized to work with Larry Fink and our new BlackRock colleagues,” said Scott Kapnick, HPS CEO.

The transaction is expected to close in mid-2025 subject to regulatory approvals and customary closing conditions.

Perella Weinberg Partners served as lead financial advisor to BlackRock. Morgan Stanley also served as financial advisor, with Skadden, Arps, Slate, Meagher & Flom and Clifford Chance acting as legal counsel.

JP Morgan Securities served as lead financial advisor to HPS, with Goldman Sachs, BofA Securities, Deutsche Bank Securities, BNP Paribas, and RBC Capital Markets acting as co-financial advisors, and Fried, Frank, Harris, Shriver & Jacobson serving as legal counsel. 

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