HPS founders Scott Kapnick, Scot French and Michael Patterson will lead a new private financing solutions business unit with BlackRock, the asset manager said today in a statement.
“Together with the scale, capabilities, and expertise of the HPS team, BlackRock will deliver clients solutions that seamlessly blend public and private,” BlackRock CEO Larry Fink said in the statement.
The transaction is expected to be completed in mid-2025, pending regulatory approval. That would leave BlackRock, which manages US$11.5 trillion, with almost US$600 billion of alternative assets.
“The combination of HPS’s proven culture of investment discipline with BlackRock’s global reach will allow us to seize new opportunities for our investors and employees,” Kapnick, HPS’ CEO, said in the statement.
The deal caps a year of Fink’s efforts to transform the world’s biggest manager of public stocks and bonds into a formidable player in private assets coveted by pensions, insurers, sovereign wealth funds and rich individuals.
With HPS and its earlier purchase of Global Infrastructure Partners, BlackRock has won the two largest-ever acquisitions of alternative asset managers in less than a year.
In October, the company completed the US$12.5 billion GIP acquisition, making BlackRock one of the largest managers of infrastructure assets with about US$170 billion.
It’s already in the final stages of completing a £2.55 billion (US$3.25 billion) deal for private-markets data provider Preqin.
HPS manages US$148 billion of client assets, making it one of the largest independent managers in the surging private credit market.
BlackRock expects the deal to increase its private markets fee-paying assets under management by 40%, and its management fees by 35%.
Founded in 2007, the firm bought itself out of JPMorgan Chase & Co in 2016 in a deal that valued it at almost US$1 billion.
HPS had been pursuing a potential initial public offering that would’ve valued the firm at US$10 billion or more, Bloomberg reported in September.
With HPS, BlackRock’s alternative-investments business will be larger than Carlyle Group Inc’s and begin to rival – at least in size – private-asset leaders such as KKR & Co and Apollo Global Management Inc.
Blackstone Inc is still considerably larger, with about US$1.1 trillion of assets at the end of the third quarter.
Perella Weinberg Partners and Morgan Stanley served as financial advisers to BlackRock, while JPMorgan Chase & Co, Goldman Sachs Group Inc, Bank of America Corp, Deutsche Bank AG, BNP Paribas SA, and Royal Bank of Canada advised HPS.