Michael Nagle / Bloomberg/Getty Images
The Key Takeaways
- BlackRock acquires HPS Investment Partners for a total of approximately $12 billion.
- The move to buy HPS is the asset management giant's latest push into the growing world of private credit.
- The nearly $150 billion managed by HPS will bring BlackRock's managed "alternative assets" to about $600 billion, the Wall Street Journal reported.
BlackRock has acquired private credit company HPS Investment Partners for a price of about $12 billion. This is part of BlackRock’s push to expand into this growing industry.
HPS’s executives and staff will be able to exchange their equity for BlackRock’s shares worth approximately 12.1 million. The deal will close with 75% equity paid, and the remainder 25% plus an extra bonus pool over the following five years.
BlackRock CEO Larry Fink prioritised an expansion of the industry. Global Infrastructure Partners and Preqin (a data company for private markets) were acquired by the firm in previous years.
HPS manages about $150 billion in assets, and will increase BlackRock's "alternative asset" pool to roughly $600 billion, closer to private market competitors like KKR and Apollo Global Management, according to the Wall Street Journal.
“I think the biggest growth vector in private credit over the next decade is the expansion of our focus from the non-investment-grade world into the investment-grade world,” HPS co-founder Michael Patterson told the Journal. “The industry is changing really rapidly."
BlackRock has said that it anticipates the closing of the transaction to be by the middle next year.
BlackRock’s shares are little changed at $1,025. They have grown by about 26% in the past year.
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