Abu Dhabi-based asset manager Lunate is considering a significant investment in HPS Investment Partners, a private credit firm, as HPS explores options for an initial public offering (IPO) or a potential sale, according to a report by Bloomberg.
The report cites unnamed sources familiar with the matter as confirming that Lunate is evaluating an investment of $1 billion or more in HPS, although discussions are still ongoing and confidential. In addition to a possible equity stake, HPS could seek additional capital to manage as part of any deal.
HPS, one of the largest independent managers in the $1.7tn private-credit market, is also attracting interest from other major firms, with BlackRock Inc considering a purchase, according to an earlier Bloomberg report. Private equity giant CVC Capital Partners meanwhile, has shown on-and-off interest in a potential combination with HPS, although no formal negotiations between the to parties are currently underway.
Neither Lunate nor HPS has commented publicly on the matter.
Founded in 2007 by Scott Kapnick, Scot French, and Mike Patterson, HPS has grown to manage $98bn in private credit and $19bn in public credit as of June, and could be valued at $10bn or more if it post for an IPO. In 2016, the firm completed a complex buyout from JPMorgan Chase, valuing it close to $1bn.
