BlackRock Nears Deal To Acquire Private Credit Manager HPS: Report

BlackRock had a verbal agreement to acquire a private credit manager, HPS Investment Partners.

The deal was first reported by the Financial Times, stating that the value of the deal would be closer to $12 billion. This would give HPS a higher premium as compared to a post-IPO scenario, which would only give it a valuation of $10 billion.

According to people familiar with the matter, both sides have already agreed on the structure of the deal and are looking forward to making the announcement after Thanksgiving.

BlackRock is considered as the largest asset manager in the world with more than $10 trillion in its portfolio. It now seeks to capitalize an increase in investor demand for alternative assets. This would include infrastructure and private equity, Reuters reported.

On the other hand, HPS Investment Partners is a global investment firm. It manages assets across debt, syndicated leveraged loans, real estate and asset-based financing schemes. As of June 2024, HPS had $117 billion of assets under its management.

In July, BlackRock already assented to buying Preqin, a UK-based data firm, for approximately $3.32 billion cash.

The deal, which was part of BlackRock's strategy to acquire specialized data providers, is anticipated to be officially announced on Monday.

In recent years, there have been significant acquisitions in the data provider sector, such as S&P Global's acquisition of IHS Markit for $44 billion in 2020 and the London Stock Exchange Group's purchase of Refinitiv for $27 billion. Private equity firms have also targeted smaller firms, with Permira acquiring a majority stake in Reorg, valuing the distressed debt and bankruptcy information provider at approximately $1.3 billion.

BlackRock intended to maintain Preqin as a distinct service while also incorporating its data feeds into BlackRock's Aladdin and eFront risk management platforms. The deal is anticipated to be finalized later this year.

In August, BlackRock also showed its strength in cryptocurrency having continued its domination in the cryptocurrency exchange-traded funds (ETFs) segment. It became the first among issuers of spot Ethereum ETFs to reach $1 billion in cumulative net inflows.

BlackRock's $ETH ETF, $ETHA, hit $1 billion in cumulative net inflows, as per data from financial research platform for crypto investors SosoValue. It is the first among the other nine issuers of Ethereum ETFs to reach the said inflows figure, marking another milestone in the investment manager's crypto business.