On December 7, 2024, BlackRock announced its plan to acquire HPS Investment Partners for $12 billion in stock. This move aims to enhance BlackRock's footprint in the burgeoning private credit sector, which has gained significant traction in recent years.

Larry Fink, BlackRock's CEO, emphasized the firm's commitment to anticipating client needs. He stated that the integration of HPS's expertise and capabilities will enable BlackRock to offer solutions that effectively combine public and private investment strategies.

The acquisition is set to close in mid-2025 and comes at a time when private credit is experiencing substantial growth. Publicly traded firms similar to HPS, such as Blue Owl Capital and Ares, have seen impressive stock increases of 54.6% and 46% respectively in 2024, outpacing BlackRock's own 25.7% gain year-to-date.

With this transaction, BlackRock aims to establish a comprehensive private credit franchise, managing approximately $220 billion in assets. HPS currently oversees about $148 billion, while BlackRock's total assets under management (AUM) stand at $11.5 trillion as of the third quarter of 2024.

Reports indicate that HPS initially considered going public, which attracted BlackRock's interest as it seeks to expand its alternative assets portfolio. Earlier in 2024, BlackRock announced its intention to acquire Global Infrastructure Partners and private market data provider Preqin for $12.5 billion and $3.2 billion, respectively.

This acquisition is projected to boost BlackRock's private market AUM by 40% and increase management fees by approximately 35%. The strategic move underscores BlackRock's ongoing efforts to diversify its offerings and strengthen its position in the competitive asset management landscape.