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BlackRock has reached a joint deal to buy HPS Investment Partners, as the world’s largest asset manager looks to boost its alternative investments business with the addition of one of its largest private credit groups. The biggest man on Wall Street.
The two sides have widely agreed outline of the agreement aims to announce general terms after the Thanksgiving holiday, according to four people familiar with the matter.
HPSfounded less than two decades ago by former Goldman Sachs investment banker Scott Kapnick, earlier this year worked toward a publicly priced initial public offering company at about 10 billion USD. The sale could carry a significant premium over that price. Two sources said the final price would be closer to $12 billion than $10 billion.
Although there is a possibility that this deal will fail, slat prides itself on its ability to provide near-certainty to its acquisition partners.
The deal would mark the latest expansion move by BlackRock, which manages $11.5 trillion in assets and is making a series of major acquisitions. Founder Larry Fink has aimed to solidify his footprint in the fast-growing alternative assets business, which offers fees far higher than the exchange-traded funds that have powered its rise. its previous growth.
Last month BlackRock completed a $12.5 billion acquisition of infrastructure investment firm Global Agricultural Partners. In July, it also agreed to buy Preqin, a UK private markets data group, for £2.55 billion in cash.
BlackRock is also in talks with Millennium Management about a tie-up deal that could see the asset manager take a minority stake in Izzy Englander’s $69.5 billion multi-strategy hedge fund manager .
HPS has become a giant in private credit since its founding as a JPMorgan Chase unit in 2007, it managed nearly $150 billion at the end of September. It was an early and successful investor in the sector, and has benefited as Traditional banks retreated from some of their core lending franchises as post-crisis regulations slashed their profits or pushed them out of business altogether.
The private equity firm is one of the most sought-after money management firms in the private investment industry. It is one of the few private credit managers of comparable size that could pivot to an acquirer like BlackRock, which is looking to get ahead in a growing asset class as Competitors such as Ares, Apollo and Blackstone take market share.
HPS did not respond to a request for comment. BlackRock declined to comment. It has $450 billion in alternative assets under management, now that the GIP deal has ended.
Additional reporting by James Fontanella-Khan and Antoine Gara
