BlackRock expanding in private credit, buys HPS Investment Partners for $12 billion

BlackRock said Tuesday it will acquire HPS Investment Partners for $12 billion in stock, as the world's largest asset manager looks to grow its presence in the highly popular private credit space.

"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," CEO Larry Fink said in a statement.

The deal, which is expected to close in mid-2025, comes during a boom for the private credit space. Comparable publicly traded companies to HPS such as Blue Owl Capital and Ares are up 54.6% and 46%, respectively, for 2024. Those gains are well ahead of BlackRock's 25.7% year-to-date gain.

The transaction also creates "an integrated private credit franchise" with about $220 billion in assets, per BlackRock. HPS manages about $148 billion in assets. BlackRock oversees $11.5 trillion as of the third quarter.

Sources told CNBC that HPS first sought to go public, which caught BlackRock's attention as it looks to grow its alternative assets business. BlackRock earlier this year announced it would acquire Global Infrastructure Partners and private market data provider Preqin for $12.5 billion and $3.2 billion, respectively.

The deal is also expected to raise BlackRock's private market AUM and management fees by 40% and roughly 35%, respectively.

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