BlackRock to Acquire HPS Investment Partners

(Reuters) – BlackRock (NYSE:BLK) will buy private credit firm HPS Investment Partners for about $12 billion in an all-stock deal, the companies announced on Tuesday, as the world's largest asset manager aims to expand in a thriving market.

Private Credit Growth

Private credit, or lending to companies by institutions other than banks, has rapidly increased in recent years. Stricter regulations have made it more expensive for traditional lenders to finance riskier loans.

The asset class is expected to grow from $1.5 trillion at the end of 2023 to $2.6 trillion by 2029, according to Preqin data.

BlackRock's Position

BlackRock, managing $11.5 trillion in assets, has an existing $85 billion private credit platform as of September 30. CEO Larry Fink has stated that private credit will be a primary growth driver within alternatives for BlackRock in the coming years.

HPS, founded in 2007 as a division of Highbridge Capital Management (the hedge fund unit of JPMorgan's asset management arm), was acquired by top HPS executives in 2016. Since then, HPS has grown significantly, with assets under management increasing to $148 billion as of September from $34 billion in 2016.

Analyst Cathy Seifert at CFRA Research noted that for BlackRock, “it's important to grow alternatives to gain a presence in the rapidly growing space,” before the deal was announced. The acquisition is expected to close in mid-2025.