BlackRock has agreed to a $12bn deal to acquire HPS Investment Partners, a global specialist in credit investment management with $148bn in client assets, with the entire transaction to be completed entirely in BlackRock equity.
According to a press statement, the deal will create an integrated private credit platform managing approximately $220bn in client assets.
“The acquisition strengthens BlackRock’s position in private credit by combining its global relationships and expertise with HPS’s flexible capital and diversified origination capabilities. Together, the firms aim to meet client demand for comprehensive income solutions across public and private markets,” the statement said.
The acquisition will establish a new business unit within BlackRock, led by HPS executives Scott Kapnick, Scot French, and Michael Patterson, focusing on: senior and junior credit solutions; asset-based financing; real estate and private placements; and collateralised loan obligations (CLOs).
The combined platform will cater to a diverse client base, including insurers, pensions, sovereign wealth funds, and individual investors seeking long-term capital opportunities.
BlackRock also expects the deal to increase its private markets fee-paying assets under management (AUM) by 40% and management fees by 35%, significantly enhancing earnings potential.
The deal will be financed through 12.1 million BlackRock SubCo Units, exchangeable into common stock, with a portion deferred over five years and linked to performance milestones. A $675m equity retention pool will be established for HPS employees.
The transaction, which is subject to regulatory approvals, is expected to close by mid-2025.
