BlackRock's HPS acquisition plan promises to strengthen its foothold in the booming private credit market
BlackRock, the world’s largest asset manager, announced plans to acquire HPS Investment Partners for US$12bn in stock, according to CNBC.
The acquisition, expected to close by mid-2025, aims to bolster BlackRock’s position in the private credit space, a sector experiencing rapid growth.
Larry Fink, CEO of BlackRock, stated, “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.”
HPS, which manages approximately US$148bn in assets, will combine with BlackRock to create an integrated private credit franchise overseeing US$220bn in assets.
BlackRock’s total assets under management (AUM) reached US$11.5tn in the third quarter.
The private credit market has seen significant momentum, with comparable publicly traded companies like Blue Owl Capital and Ares achieving 2024 gains of 54.6 percent and 46 percent, respectively.
These gains outpaced BlackRock’s own 25.7 percent year-to-date increase.
According to sources cited by CNBC, HPS initially explored going public, which drew BlackRock’s interest as it seeks to expand its alternative assets business.
Earlier in 2024, BlackRock announced acquisitions of Global Infrastructure Partners and private market data provider Preqin for US$12.5bn and US$3.2bn, respectively.
This latest transaction is expected to increase BlackRock’s private market assets under management by 40 percent and boost management fees by approximately 35 percent.
