BlackRock agrees to buy HPS Investment Partners

BlackRock has agreed the formative terms of a deal to acquire HPS Investment Partners, as the asset manager looks to bolster its private credit capabilities.

The two firms have agreed on the broad outline of the deal, according to the Financial Times, with a plan to announce general terms after the Thanksgiving holiday in the US, according to four people with knowledge of the matter cited in the report.

HPS was previously considering an IPO which would have valued the the private credit manager at approximately $10bn (£7.9bn).

Two sources told the Financial Times that a sale could offer a significant premium over that price, with BlackRock expected to pay up to $12bn for HPS.

BlackRock, the world’s largest asset manager, has been expanding its private credit unit as it looks to compete with the likes of industry behemoths Ares and Apollo.

In September, the firm revamped its private credit business with the launch of a new division and a management shake-up.

It has also been on an acquisition spree. At the start of October, BlackRock bought infrastructure private markets investment platform Global Infrastructure Partners, in a deal worth $12.5bn. It has also agreed to buy private market data provider Preqin for an estimated $3bn.

As one of the largest independent private credit managers on the market, HPS is an attractive target for BlackRock, with assets under management of nearly $150bn.

In June, HPS raised a record $21.1bn for its latest private credit fund.