Andrew Ross Sorkin speaks with BlackRock CEO Larry Fink at the New York Times DealBook Summit in the Appel Room at Jazz at Lincoln Center on November 30, 2022 in New York City Larry Fink.
Michael M. Santiago | Michael M. SantiagoGetty Images
BlackRock The world’s largest asset manager said on Tuesday it would acquire HPS Investment Partners for $12 billion in stock, as the world’s largest asset manager looks to expand its presence in the popular private credit sector.
Chief Executive Officer Larry Fink said: “We remain committed to meeting the needs of our clients. Combined with the scale, capabilities and expertise of the HPS team, BlackRock will provide clients with solutions that seamlessly blend public and private. said in a statement.
The deal, expected to close in mid-2025, comes amid a boom in the private credit sector. Listed companies similar to HPS, e.g. Blue Owl Capital and Ares By 2024, the company’s shares are up 54.6% and 46%, respectively.
The deal also creates a “consolidated private credit franchise” with approximately $220 billion in assets, according to BlackRock. HPS manages approximately $148 billion in assets. As of the third quarter, BlackRock had $11.5 trillion in assets under management.
Sources told CNBC that HPS sought to go public first, which caught the attention of BlackRock as the company looks to grow its alternative assets business. BlackRock announced earlier this year that it would acquire Global Infrastructure Partners and private market data provider Preqin for US$12.5 billion and US$3.2 billion respectively.
The deal is also expected to increase BlackRock’s private markets assets under management and management fees by 40% and approximately 35%, respectively.
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