BLACKROCK is among firms exploring a purchase of HPS Investment Partners, according to sources with knowledge of the matter, in a deal that would push the world’s biggest asset manager into the top ranks of the private-credit market.
The two firms have held talks as HPS also pursues a potential initial public offering (IPO), said the sources, who requested anonymity to discuss confidential information. Such an IPO may value HPS at US$10 billion or more, Bloomberg News has reported. An acquisition would likely require a premium to that valuation, some of the sources said.
A deal has not been reached and talks could conclude without an agreement, some of the sources said.
“We do not comment on market rumours or speculation,” Ed Sweeney, a spokesperson for BlackRock, said. A representative for HPS did not immediately respond to a request for comment.
BlackRock is not alone in holding talks with HPS as multiple potential suitors weigh preempting the firm’s IPO, some of the sources said. Private equity firm CVC Capital Partners has been interested in a potential combination with HPS and has held on-and-off talks, but no formal negotiations are currently underway, sources familiar with the matter said. CVC declined to comment.
BlackRock, like many rivals, is seeking to position itself as a one-stop shop for a full range of investing options, including alternative assets that are in greater demand by clients such as pensions and sovereign wealth funds. The company has already inked two deals this year to bulk up in alternative assets, and has flagged private credit as one of its top growth priorities.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Industry surge
The rise of private credit has spurred several recent partnerships and acquisitions, including alternative asset manager Apollo Global Management’s agreement to team up with Citigroup on US$25 billion worth of deals over the next five years. Last year, Apollo seized on weakness at Credit Suisse Group to buy its structured finance business, which has become an integral part of the firm’s plan to become a lending machine.
Lazard has also considered several opportunities to acquire a private-credit firm, as has the biggest US bank, JPMorgan Last year, TPG agreed to buy credit firm Angelo Gordon for US$2.7 billion.
HPS said in August that it was expanding a strategic partnership with Guardian Life Insurance Co of America. The insurer acquired a minority stake in HPS in 2022 and agreed to provide capital to the credit firm.
Founded in 2007 by Scott Kapnick, Scot French and Mike Patterson, HPS is among the largest independent managers in the US$1.7 trillion private-credit market and has come to epitomize the industry’s surge over the past several years. HPS managed US$98 billion of assets in private credit and US$19 billion in public credit at the end of June. In 2016, the firm bought itself out of JPMorgan in a complicated deal that valued it at close to US$1 billion.
BlackRock, which managed about US$10.6 trillion in client assets at midyear, last week said it completed its US$12.5 billion acquisition of Global Infrastructure Partners. In June, it agreed to buy private-capital database provider Preqin. Led by Larry Fink, BlackRock manages roughly US$86 billion in private debt strategies, including about US$35 billion of direct lending assets.
But the New York-based company has lagged behind smaller rivals in the lucrative and growing world of private credit, seeing firms such as Apollo, Blackstone, Ares Management and Blue Owl Capital dominate the business in recent years. In September, BlackRock shook up the senior leadership of its private-debt business. BLOOMBERG
