BlackRock seals $12bn deal for HPS Investment Partners
BlackRock has inked a definitive agreement to acquire HPS Investment Partners for approximately $12bn (£9.5bn), with 100 per cent of the consideration paid in BlackRock equity.
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BlackRock and HPS will form a new private financing solutions business unit led by HPS co-founders Scott Kapnick, Scot French, and Michael Patterson.
The combined platform will work across senior and junior credit solutions, asset-based finance, real estate, private placements, and collateralised loan obligations, and unite direct lending, fund finance, and BlackRock’s GP and LP solutions.
Kapnick, French, and Patterson will join BlackRock’s global executive committee and Kapnick will be an observer to the BlackRock board of directors.
The deal is expected to increase private markets fee-paying assets under management and management fees by 40 per cent and approximately 35 per cent, respectively, and be modestly accretive to BlackRock’s adjusted earnings per share in the first full year after the transaction closes in mid-2025.
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“I am excited by what HPS and BlackRock can do together for our clients and look forward to welcoming Scott Kapnick, Scot French, and Michael Patterson, along with the entire HPS team, to BlackRock,” said BlackRock chairman and chief executive Laurence Fink. “We have always sought to position ourselves ahead of our clients’ needs. Together with the scale, capabilities, and expertise of the HPS team, BlackRock will deliver clients solutions that seamlessly blend public and private.”
BlackRock expects the private debt market will more than double to $4.5trn by 2030. The firm said the duration, returns, and yield characteristics of private credit match the needs of clients with long-dated capital, including insurance companies, pensions, sovereign wealth funds, wealth managers, and investors saving for retirement.
Kapnick added: “The combination of HPS’s proven culture of investment discipline with BlackRock’s global reach will allow us to seize new opportunities for our investors and employees and set us up for continued success for the next decade and beyond. My partners and I are energised to work with Larry Fink and our new BlackRock colleagues.”
Perella Weinberg Partners served as lead financial advisor to BlackRock. Morgan Stanley also served as financial advisor, with Skadden, Arps, Slate, Meagher & Flom and Clifford Chance acting as legal counsel.
J.P. Morgan Securities served as lead financial advisor to HPS, with Goldman Sachs, BofA Securities, Deutsche Bank Securities, BNP Paribas, and RBC Capital Markets acting as co-financial advisors and Fried, Frank, Harris, Shriver & Jacobson serving as legal counsel.
Read more: HPS limits private credit fund inflows amid surging demand
