BlackRock Acquires HPS Investment Partners for $12 Billion in Private Credit Expansion
BlackRock, the world’s largest asset manager, has announced its acquisition of HPS Investment Partners for a staggering $12 billion in stock. This move comes as BlackRock aims to solidify its presence in the increasingly popular private credit space, demonstrating a strategic step towards meeting the evolving needs of its clients.
The Who, What, Where, and When
During the New York Times DealBook Summit at the Jazz At Lincoln Center in New York City on November 30, 2022, BlackRock CEO Larry Fink revealed the groundbreaking news of the acquisition. This significant development signifies BlackRock’s proactive approach to anticipating and addressing the demands of its clientele.
The Why Behind the Acquisition
In a statement, CEO Larry Fink highlighted the rationale behind the acquisition, emphasizing BlackRock’s commitment to staying ahead of the curve. By combining the strengths, expertise, and resources of the HPS team with BlackRock’s existing capabilities, the company aims to deliver innovative solutions that seamlessly integrate both public and private sectors.
The Impact and Future Outlook
The acquisition is slated to close in mid-2025, marking a pivotal moment in the private credit market’s current boom. Comparable companies like Blue Owl Capital and Ares have seen substantial gains in 2024, outpacing BlackRock’s own performance. This strategic move will establish an integrated private credit franchise with a combined asset value of approximately $220 billion, solidifying BlackRock’s position as a dominant player in the industry.
Furthermore, sources reveal that HPS initially considered going public, a decision that captured BlackRock’s attention amidst its expansion efforts in alternative assets. With recent acquisitions of Global Infrastructure Partners and Preqin, BlackRock has been actively strengthening its foothold in the private market arena, positioning itself for sustained growth and enhanced client offerings.
In conclusion, this acquisition is projected to significantly boost BlackRock’s private market assets under management (AUM) and management fees, signaling a promising trajectory for the company’s future performance and market standing. Subscribe to CNBC PRO for exclusive insights and in-depth analysis on this development and more.
