BlackRock is expanding its private credit business by purchasing HPS Investment Partners for $12 billion.

• The private credit space is experiencing growth, and the deal, expected to close in mid-2025, is part of this boom.
• The transaction results in the formation of an integrated private credit franchise with approximately $220 billion in assets, according to BlackRock. HPS manages around $148 billion in assets.

On Tuesday, it was announced that HPS Investment Partners would be acquired by the world's largest asset manager for $12 billion in stock, as the company seeks to expand its presence in the private credit market.

Larry Fink, CEO of BlackRock, stated that the company has always aimed to anticipate clients' requirements and provide them with innovative solutions. By leveraging the size, skills, and knowledge of the HPS team, BlackRock will offer clients seamless solutions that combine public and private sectors.

The private credit space is experiencing a boom, with comparable publicly traded companies to HPS such as and up 54.6% and 46%, respectively, for 2024. Those gains are well ahead of BlackRock's 25.7% year-to-date gain. The deal, which is expected to close in mid-2025, is part of this growth.

The transaction results in the creation of an integrated private credit franchise with approximately $220 billion in assets, according to BlackRock. HPS manages about $148 billion in assets. BlackRock currently oversees $11.5 trillion as of the third quarter.

Sources informed CNBC that HPS initially intended to go public, which piqued BlackRock's interest as it aims to expand its alternative assets business. Earlier this year, BlackRock revealed its plans to acquire Global Infrastructure Partners and private market data provider Preqin for $12.5 billion and $3.2 billion, respectively.

The deal is predicted to increase BlackRock's private market AUM and management fees by approximately 40% and 35%, respectively.