BlackRock's $12 Billion Leap into Private Credit with HPS Acquisition

BlackRock, the world's largest asset manager, has taken a significant stride into the private credit market with its $12 billion acquisition of HPS Investment Partners. This strategic move positions BlackRock to provide insurance clients with a broader range of private financing solutions, as well as to capitalize on the growing demand for private credit.

HPS Investment Partners, a leading global credit investment manager, brings its $148 billion in client assets to the table, bolstering BlackRock's private credit franchise to approximately $220 billion. The acquisition, expected to close mid-2025, will create an integrated private credit franchise that offers clients customized financing solutions tailored to their liquidity, yield, and diversification needs.

The combined entity will have broad capabilities across senior and junior credit solutions, asset-based finance, real estate, private placements, and CLOs. This diverse skill set will enable BlackRock to cater to the unique financing needs of corporate and asset-based finance clients, further strengthening its commitment to responsible investing.

BlackRock's global reach and relationships will drive HPS's expansion into new markets, while HPS's proven track record and expertise will enhance BlackRock's private credit capabilities. The acquisition is expected to increase BlackRock's private markets fee-paying AUM and management fees by 40% and ~35%, respectively.

In the rapidly growing private credit market, BlackRock's acquisition of HPS solidifies its position as a major player. The global private credit market is projected to reach $4.5 trillion by 2030, more than doubling its current size. This acquisition places BlackRock at the forefront of this trend, poised to benefit from the increasing demand for private financing solutions.

The integration of HPS's origination and capital flexibility with BlackRock's $3 trillion public fixed income business will offer investors customized portfolios that seamlessly blend public and private income solutions. This approach will enable BlackRock to better serve insurance clients and other asset owners seeking tailored financing solutions, optimizing liquidity, yield, and diversification.

As the private credit market continues to grow, BlackRock's acquisition of HPS positions it to connect companies of all sizes with financing that supports economic growth and job creation. This strategic move allows BlackRock to address the evolving needs of its clients while capitalizing on the opportunities presented by the expanding private credit landscape.