BlackRock expanding in private credit, buys HPS Investment Partners for $12 billion

Core Viewpoint - BlackRock is acquiring HPS Investment Partners for $12 billion in stock to enhance its presence in the private credit market, which is currently experiencing significant growth [1][3]. Group 1: Acquisition Details - The acquisition is expected to close in mid-2025 and will create an integrated private credit franchise with approximately$220 billion in assets [3]. - HPS manages about $148 billion in assets, while BlackRock oversees$11.5 trillion as of the third quarter [3]. Group 2: Market Context - The private credit space is booming, with comparable publicly traded companies like Blue Owl Capital and Ares seeing stock price increases of 54.6% and 46% respectively for 2024, outpacing BlackRock's year-to-date gain of 25.7% [3]. - The deal is part of BlackRock's strategy to grow its alternative assets business, following previous acquisitions of Global Infrastructure Partners and Preqin for $12.5 billion and$3.2 billion respectively [4]. Group 3: Financial Impact - The transaction is expected to increase BlackRock's private market assets under management (AUM) by 40% and management fees by approximately 35% [4].