BlackRock bets big on private credit with $12B HPS deal

Investment giant BlackRock struck a $12 billion all-stock deal to acquire private credit manager HPS Investment Partners, signaling it is doubling down on private markets.

Private credit involves lending money to businesses directly instead of through a bank. It has become popular lately as banks retreated from riskier lending after the 2008-09 financial crisis.

The private credit market could grow to $3 trillion in the next few years, according to Moody’s estimates, and BlackRock wants to be a leader in this growing market.

HPS manages $150 billion in assets, lending to midsize companies, real estate, and asset-backed financings like mortgages and credit card loans.

The acquisition bolsters BlackRock’s alternative asset tally by over 25%, bringing it to nearly $600 billion and positioning it alongside private market heavyweights like KKR and Apollo.

HPS would mark BlackRock’s third private-markets acquisition this year, following its $12.5 billion deal for alternative asset manager Global Infrastructure Partners and a $3.2 billion purchase of Preqin, which provides data on private assets.