BlackRock set to acquire HPS, a global credit investment manager

By Gloria Mathias

BlackRock and HPS Investment Partners (HPS), a global credit investment manager with approximately $148 billion in client assets, have entered into a definitive agreement for BlackRock to acquire HPS for approximately $12 billion, with 100% of the consideration paid in BlackRock equity.

The equity is issued by a wholly-owned subsidiary of BlackRock (SubCo Units) and exchangeable on a one-for-one basis into BlackRock’s common stock.

The future of fixed income is building public and private portfolios to optimise liquidity, yield, and diversification. This transaction will combine BlackRock’s strong corporate and asset owner relationships with HPS’s diversified origination and capital flexibility. The combined private credit franchise will work side-by-side with BlackRock’s $3 trillion public fixed-income business to provide clients with both public and private income solutions across their whole portfolios.

“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. We have always sought to position ourselves ahead of our client’s needs. Together with the scale, capabilities, and expertise of the HPS team, BlackRock will deliver clients solutions that seamlessly blend public and private,” said Laurence D. Fink, BlackRock Chairman and CEO.

Durable global growth will require higher volumes of debt financing, and markets are increasingly looking to private capital as an answer. The addition of HPS will position BlackRock to connect companies of all sizes, from small and medium-sized businesses to large corporations, with financing for investments that support economic growth and job creation.

BlackRock and HPS will form a new private financing solutions business unit led by Scott Kapnick, Scot French, and Michael Patterson. This combined platform will have broad capabilities across senior and junior credit solutions, asset-based finance, real estate, private placements, and CLOs.

“Today marks an important milestone in our drive to become the world’s leading provider of private financing solutions. Our partnership with BlackRock will further strengthen our position in this fast-growing but increasingly competitive market. 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,” said Scott Kapnick, HPS CEO.