Blackrock (NYSE: BLK) has announced its acquisition of HPS Investment Partners, a global credit investment manager with approximately $148 billion in client assets, for approximately $12 billion, with 100% of the consideration paid in Blackrock equity. This acquisition is expected to create an integrated private credit franchise with approximately $220 billion in client assets.
The transaction is structured for leadership continuity and alignment with Blackrock's shareholders, with proceeds paid in Blackrock equity. The acquisition is expected to increase private markets fee-paying assets under management (AUM) and management fees by approximately 40% and 35%, respectively.
The combined private credit franchise is anticipated to work alongside Blackrock's $3 trillion public fixed income business to provide both public and private income solutions for clients across their whole portfolios.
This acquisition is projected to increase private markets fee-paying AUM and management fees by 40% and approximately 35%, respectively, and be modestly accretive to Blackrock’s as-adjusted earnings per share in the first full year post-close.
The transaction is expected to close in mid-2025, subject to regulatory approvals and customary closing conditions.
Blackrock has seen significant growth in its fixed income capabilities since its founding in 1988, now serving clients through a $3 trillion platform across various fixed income segments.
This acquisition is expected to deepen Blackrock’s capabilities for insurance clients, positioning the company as a leading provider of solutions for insurers, with HPS being a leading independent provider of private credit for insurance clients.
The acquisition is seen as a strategic move to position Blackrock in the fast-growing private credit market, which is expected to more than double to $4.5 trillion by 2030.
Today the company's shares have moved -0.3% to a price of $9.27. For more information, read the company's full 8-K submission here.
