BlackRock it has achieved its third major acquisition this year. It is the world’s largest asset manager to buy HPS Investment Partners in $12 billion equity offering to create leading global credit manager.
Private credit, which refers to non-bank companies that provide loans to businesses, is one of the hottest sectors on Wall Street. BlackRock previously said it was expected the global private debt market will reach $3.5 trillion in AUM by the end of 2028. The company updated that forecast on Tuesday, now predicting that traditional private credit will double to more than $4.5 trillion by 2030. investor presentation announcing the acquisition.
BlackRock’s acquisition of HPS, a leading global credit investment manager with $148 billion in client assets, was widely anticipated. It was firm considering An IPO earlier this year, but chose to sell to the asset manager giant instead. By acquiring HPS, BlackRock expects to create a combined private credit franchise with approximately $220 billion in client assets. The deal is expected to close in mid-2025.
“Blackrock has been talking about credit for a long time. They can get a good company rather than trying to build one from scratch,” said one industry executive.
BlackRock shares fell to a 52-week low of $742.22 in December 2023, but have since rebounded. Shares closed at $1039 on Tuesday, up nearly 2%.
HPS co-founders Scott Kapnick, Scot French and Michael Patterson They are joining BlackRock’s global executive committee and Kapnick will also serve as an observer on BlackRock’s board. (Kapnick, French and Patterson are former Goldman Sachs directors.)
Founded in 2007, HPS was known as Highbridge Principal Strategies. It originally operated as a division of Highbridge Capital Management, which was part of JP Morgan Asset Management. In 2016, the directors and employees of HPS acquired the company from Highbridge and JP Morgan Asset Management. It employs more than HPS 760 employeesincluding 252 investment professionals.
Looking for transformation
The HPS deal is the latest acquisition by BlackRock, which is building its alternatives platform. CEO Larry Fink wants to push BlackRock into the more lucrative worlds of private markets, which include private equity, private credit and real estate. The Wall Street Journal notify in november
October, BlackRock closed It has bought PE firm Global Infrastructure Partners for $12.5 billion, which is ranked 20th.th The largest global merger announced this year, according to Dealogic. BlackRock is spending $3.2 billion to buy the yet-to-be-closed Preq, a private market data provider.
Since it exceeded $9 trillion in AUM in early 2023, BlackRock said. hunting opportunity for “transformation”. One of BlackRock’s most significant deals remains its $13.5 billion to buy of iShares in 2009, which is still the largest provider of ETFs $4.2 trillion AUM at the end of September
“(BlackRock) wants to be in everything. And they have the market power to buy things,” said a banker.
Perella Weinberg partners and Morgan Stanley provided financial advice to BlackRock, and Peter Serating, Patrick Lewis and Laura Kaufmann Belkhayat of Skadden, Arps, Slate, Meagher & Flom, along with Clifford Chance, provided legal advice. JP Morgan Securities acted as legal advisor to HPS, while Goldman Sachs, BofA Securities, Deutsche Bank securities, BNP Paribas and RBC Capital Markets served as financial advisors. Fried, Frank, Harris, Shriver & Jacobson acted as their legal counsel.
