BlackRock More Than Doubles Private Credit Business With HPS Investment Partners Acquisition

BlackRock announced Tuesday that it has entered into a definitive agreement to acquire private credit manager HPS Investment Partners LLC for $12 billion. The transaction is expected to close by the middle of 2025.

HPS manages $148 billion in combined assets across both private credit and public credit strategies. The acquisition would more than double BlackRock’s $90 billion in private debt assets. The firm manages more than $11 trillion in total.

According to the most recent figures from HPS, the fund’s private credit assets under management total about $123 billion, with public credit AUM of about $22 billion.

“The combined private credit franchise will work side-by-side with BlackRock’s $3 trillion public fixed income business to provide both public and private income solutions for clients across their whole portfolios,” according to a BlackRock statement.

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The credit manager was said to have been in talks with multiple suitors, including CVC Capital Partners, and considered an initial public offering, according to Bloomberg. Emirati fund Lunate reportedly also considered taking a minority stake in the manager.

The acquisition would mark one of the largest acquisitions of a private credit manager, as banks and other financial institutions do not want to be left behind in the private credit boom.

In 2019, Brookfield Asset Management acquired a 62% stake in credit manager Oaktree, adding $120 billion in assets. Brookfield managed $350 billion at the time. In late 2023, TPG ($213 billion assets under management) completed the $2.7 billion acquisition of Angelo Gordon, which managed $74 billion in credit and real estate assets at the time.

Several banks have formed partnerships with private credit managers, such as a $25 billion alliance between Citi and Apollo Global Management, focused on direct lending, announced in September. In October, JPMorganChase announced partnerships with Cliffwater, FS Investments and Shankman Capital Management.

According to PitchBook, institutional private credit AUM exceeded $1.6 trillion, as of December 31, 2023, with $520.2 billion in dry powder, according to the firm’s mid-2024 private debt report. In total, across institutional, retail and insurance funds, AUM exceeded $2 trillion.

According to a statement, BlackRock expects the private debt market to grow to $4.5 trillion by 2030, more than doubling today’s figures.

In October, BlackRock finalized the acquisition of infrastructure asset manager Global Infrastructure Partners, which managed $170 billion in assets. In July, the firm announced plans to acquire data provider Preqin for $3.2 billion.

“For over 35 years, BlackRock has grown and evolved alongside the capital markets. With GIP, and now HPS, we are expanding our private markets capabilities across our comprehensive global platform,” BlackRock CEO Larry Fink said in a statement. “Our Aladdin technology, including eFront, and soon Preqin, will make access to private markets simpler and more transparent. These capabilities, together with our global reach, deep relationships, and powerful technology, differentiate our ability to serve clients.”