Finance

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

Published

1 day ago

December 3, 2024

Andrew Ross Sorkin speaks with BlackRock CEO Larry Fink during the New York Times DealBook Summit in the Appel Room at the Jazz At Lincoln Center on November 30, 2022 in New York City.

Michael M. Santiago | Getty Images

BlackRock said Tuesday it will acquire HPS Investment Partners for $12 billion in stock, as the world’s largest asset manager looks to grow its presence in the highly popular private credit space.

“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,” CEO Larry Fink said in a statement.

The deal, which is expected to close in mid-2025, comes during a boom for the private credit space. Comparable publicly traded companies to HPS such as Blue Owl Capital and Ares are up 54.6% and 46%, respectively, for 2024. Those gains are well ahead of BlackRock’s 25.7% year-to-date gain.

The transaction also creates “an integrated private credit franchise” with about $220 billion assets, per BlackRock. HPS manages about $148 billion in assets. BlackRock oversees $11.5 trillion as of the third quarter.

Sources told CNBC that HPS first sought to go public, which caught BlackRock’s attention as it looks to grow its alternative assets business. BlackRock earlier this year announced it would acquire Global Infrastructure Partners and private market data provider Preqin for $12.5 billion and $3.2 billion, respectively.

The deal is also expected to raise BlackRock’s private market AUM and management fees by 40% and roughly 35%, respectively.

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Finance

Watch Fed Chair Jerome Powell speak live at the Dealbook conference

Published

42 minutes ago

December 4, 2024

Business Finance News

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Federal Reserve Chair Jerome Powell speaks Wednesday at the New York Times DealBook conference.

The appearances comes two weeks ahead of when the central bank will announce its decision on interest rates and is Powell’s last public appearance before then.

Markets strongly expect the Fed to lower its benchmark interest rate by another quarter percentage point from its current target range of 4.5%-4.75%. The rate-setting Federal Open Market Committee lowered the federal funds rate by a combined three quarters of a point at its September and November meetings.

In recent days, policymakers have expressed come concern about the recent edge up in the inflation rate, indicating a cautious approach on policy as they watch the data.