BlackRock to buy credit firm HPS in US$12 billion all-stock deal

BLACKROCK agreed to buy HPS Investment Partners in an all-stock deal valued at roughly US$12 billion, a purchase that will propel the world’s largest asset manager into the highest ranks of private credit.

HPS founders Scott Kapnick, Scot French and Michael Patterson will lead a new private financing solutions business unit with BlackRock, the asset manager said on Tuesday (Dec 3) in a statement.

“Together with the scale, capabilities, and expertise of the HPS team, BlackRock will deliver clients solutions that seamlessly blend public and private,” BlackRock chief executive officer Larry Fink said in the statement.

The transaction is expected to be completed in mid-2025, pending regulatory approval. That would leave BlackRock, which manages US$11.5 trillion, with almost US$600 billion of alternative assets. 

“The combination of HPS’s proven culture of investment discipline with BlackRock’s global reach will allow us to seize new opportunities for our investors and employees,” Kapnick, HPS’ CEO, said in the statement.

The deal caps a year of Fink’s efforts to transform the world’s biggest manager of public stocks and bonds into a formidable player in private assets coveted by pensions, insurers, sovereign wealth funds and rich individuals. With HPS and its earlier purchase of Global Infrastructure Partners, BlackRock has won the two largest-ever acquisitions of alternative asset managers in less than a year.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

In October, the company completed the US$12.5 billion GIP acquisition, making BlackRock one of the largest managers of infrastructure assets with about US$170 billion. It’s already in the final stages of completing a US$3.25 billion deal for private-markets data provider Preqin.

HPS manages US$148 billion of client assets, making it one of the largest independent managers in the surging private credit market. BlackRock expects the deal to increase its private markets fee-paying assets under management by 40 per cent, and its management fees by 35 per cent.

Founded in 2007, the firm bought itself out of JPMorgan in 2016 in a deal that valued it at almost US$1 billion. HPS had been pursuing a potential initial public offering that would’ve valued the firm at US$10 billion or more, Bloomberg reported in September. 

SEE ALSO

BlackRock is near deal to buy private credit manager HPS

With HPS, BlackRock’s alternative-investments business will be larger than Carlyle Group’s and begin to rival – at least in size – private-asset leaders such as KKR and Apollo Global Management. 

Blackstone is still considerably larger, with about US$1.1 trillion of assets at the end of the third quarter. BLOOMBERG