Sonali Ray, writer
Brief news
- BlackRock is acquiring HPS Investment Partners for $12 billion to enhance its presence in the private credit sector, aiming to integrate public and private solutions.
- The deal, expected to close in mid-2025, will create a private credit franchise with $230 billion in assets.
- BlackRock’s private market assets and management fees are projected to rise by 35% and 40%, respectively, following the acquisition.
Detailed news
BlackRock, the largest asset manager in the world, announced on Tuesday that it will buy HPS Investment Partners for a total of $12 billion in shares. This move comes as BlackRock makes efforts to expand its footprint in the highly competitive private credit industry.
The goal of our company has always been to put ourselves ahead of the requirements of our customers. Using the scale, skills, and knowledge of the HPS team, BlackRock will be able to provide customers with solutions that seamlessly mix public and private sectors, according to a statement released by CEO Larry Fink.
The deal, which is anticipated to be finalized in the middle of 2025, comes at a time when the private lending sector is experiencing a boom. Blue Owl Capital and Ares, two publicly traded companies that are comparable to HPS, have had their share prices increase by 54.6% and 46%, respectively, for the year 2024. In comparison to BlackRock’s year-to-date gain of 25.7%, these gains are significantly higher.
According to BlackRock, the transaction also results in the creation of “an integrated private credit franchise” that has approximately 230 billion dollars in assets. About 148 billion dollars’ worth of assets are managed by HPS. As of the third quarter, BlackRock was responsible for managing $11.5 trillion.
The fact that BlackRock was interested in expanding its alternative assets business was brought to the notice of BlackRock by the fact that sources informed CNBC that HPS initially planned to go public. In the beginning of this year, BlackRock made the announcement that it would be purchasing Global Infrastructure Partners and Preqin, a private market data provider, for a total of $12.5 billion and $3.2 billion, respectively.
BlackRock’s private market assets under management (AUM) and management fees are anticipated to increase by approximately 35 percent and forty percent, respectively, as a result of the transaction.
Source : CNBC news
