BlackRock is closing in on the acquisition of leading private credit manager HPS Investment Partners, according to reports by the Financial Times.
The two parties are said to be nearing an agreement on the terms of the deal, which would see BlackRock acquire HPS at a price between $10bn (€9.45bn) and $12bn (€11.36bn).
Contacted by IPE, BlackRock declined to comment on the transaction.
HPS Investment Partners was founded in 2007 by Scott Kapnick, former co-head of global banking at Goldman Sachs. HPS was originally part of Highbridge Capital Management, a hedge fund under the JP Morgan Asset Management umbrella.
Since it was launched, HPS has amassed over $148bn of assets, thanks to the huge growth of non-bank lending. Headquartered in New York, it has over 750 total employees and 14 offices worldwide.
The private credit manager’s HPS Specialty Loan Fund VI raised $14.3bn in capital commitments in June, or $21.1bn including leverage, according to With Intelligence, an alternative asset data and intelligence platform. That equates to 26% of total private credit fundraising in the first half of this year, it added.
BlackRock, the world’s largest asset manager with over $11.5trn of assets under management, is diversifying away from its core business, index investing and ETFs, seeking to build its fee-generation capacity. It has been building its presence in the alternative investment market through a series of acquisitions.
In October, the US firm completed the $12.5bn acquisition of Global Infrastructure Partners (GIP), the infrastructure investor with $170bn in assets. Last summer, BlackRock acquired Preqin, the UK provider of private markets data for £2.55bn.
Richard Bruyère, managing partner at Indefi, the asset management strategy consultancy, said: “Private credit managers continue to be one of the most attractive targets for asset management M&A in the market today. This persists whether the manager is a scaled platform or a more niche, specialist player like HPS.”
He added: “Scale is also increasingly key for private credit GPs. The ongoing boom in direct lending has led to sharp increases in competition as new fund launches have flooded the market. This makes origination increasingly challenging for smaller, independent GPs and facilitates tie-ups with larger platforms, allowing them to offer more bespoke financing solutions across asset classes. The capabilities of HPS should provide a new set of building blocks for BlackRock to use within these sorts of solutions.”
Indefi expects consolidation in the sector to continue, as both private asset GPs look to add additional complementary capabilities and liquid credit managers aim to diversify their traditional offering with in-demand, higher-octane private credit strategies.
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