Confirming nearly two months of speculation, BlackRock announced it has agreed to a $12B all-stock acquisition of HPS Investment Partners, a private credit investment manager that oversees $148B in client assets.
The world’s largest asset manager said the transaction will create a $220B private credit franchise that will work alongside its $3T public fixed-income business, providing public and private solutions to clients. BlackRock also noted that the integration of HPS will support its transformation into a full-service, fiduciary provider of public-private asset management and technology solutions for insurance clients.
Through the acquisition, BlackRock is hoping to capitalize on opportunities in the private debt market, which it says it expects to be worth $4.5T by 2030. Prior to the deal, the company managed $90B of private debt assets on behalf of its clients.
HPS leaders Scott Kapnick, Scot French, and Michael Patterson will form a new private financing solutions business within BlackRock, with all three also joining the company’s global executive committee and Kapnick also serving as an observer to BlackRock’s board. The new combined platform they lead will offer solutions across senior and junior credit, asset-based finance, real estate, private placements, and CLOs.
"We have always sought to position ourselves ahead of our clients’ needs. Together with the scale, capabilities, and expertise of the HPS team, BlackRock will deliver clients solutions that seamlessly blend public and private," BlackRock Chairman and CEO Larry Fink said in a statement announcing the deal.
Completion of the transaction is expected in mid-2025, subject to customary closing conditions, including regulatory approvals. In addition to the equity consideration, BlackRock will also assume responsibility for HPS' $400M of outstanding debt as part of the deal.
Perella Weinberg Partners served as lead financial advisor to BlackRock. Morgan Stanley also served as financial advisor, with Skadden, Arps, Slate, Meagher & Flom and Clifford Chance acting as legal counsel. J.P. Morgan Securities served as lead financial advisor to HPS, with Goldman Sachs, BofA Securities, Deutsche Bank Securities, BNP Paribas, and RBC Capital Markets acting as co-financial advisors and Fried, Frank, Harris, Shriver & Jacobson serving as legal counsel.
Source: https://www.businesswire.com/news/home/20241203219893/en/BlackRock-to-Acquire-HPS-Investment-Partners-to-Deliver-Integrated-Solutions-Across-Public-and-Private-Markets
