BlackRock announced it’s completed the acquisition of HPS Investment Partners (HPS), a global, credit-focused alternative investment firm. Financial details were not disclosed in the release.
Private credit is reshaping financial markets and the structural trends supporting its growth have accelerated the convergence of public and private markets. Financing activity is being shifted toward the capital markets, positioning asset managers to match long-dated capital with long-term investors, including insurance companies, pensions, sovereign wealth funds, wealth managers, and individuals saving for retirement.
With the addition of HPS, BlackRock is now positioned to more fully meet the accelerating client demands resulting from this shift, providing clients and borrowers access to integrated solutions at scale. Operating alongside BlackRock’s $3 trillion public fixed income franchise, which includes the Fundamental Fixed Income business, led by Rick Rieder, as well as the Financial Institutions Group, led by Peter Gailliot, the addition of HPS’s capabilities into a combined platform allows BlackRock to stay ahead of market evolution and client needs, as they increasingly look past traditional distinctions of “public” and “private” in accessing credit markets.
To fully capture the opportunities created by this combination, BlackRock is creating Private Financing Solutions (PFS), which will combine the firms’ private credit, GP and LP solutions, and private and liquid CLO businesses into one integrated platform.
The combined PFS team will be led by Scott Kapnick, Scot French, and Michael Patterson. HPS’s flagship strategies, including HPS Strategic Investment Partners (SIP), HPS Specialty Loan Fund (SLF), HPS Core Senior Lending Fund (CSL), and HPS Corporate Lending Fund (HLEND), and other investment strategies, will maintain their HPS branding, and the HPS business will now be known as HPS, a part of BlackRock.
Core to PFS will be an integrated private credit franchise with $190 billion in client assets and a platform to provide both public and private income solutions for clients.
The GP/LP business plays an important role in helping private markets firms and investors navigate today’s market environment through capital formation and liquidity solutions. Aligning BlackRock and HPS’s existing GP/LP businesses within the PFS structure will allow the firm to deepen relationships with sponsors and investors, delivering bespoke solutions across the platform, and partnering to resolve their most pressing needs.
Laurence Fink, BlackRock chair and CEO, said in a statement: “The creation of PFS means that we can answer far more client needs with far fewer calls, creating a comprehensive solutions provider for clients and borrowers alike. We are excited to realize the potential of this platform and thrilled to have Scott, Scot, Mike and the talented HPS team join us on this journey.”
“Current opportunities in the private credit markets are enormous and successfully navigating them will require entrepreneurial drive, disciplined risk management, global reach and a powerful platform to originate the most compelling transactions. BlackRock Private Financing Solutions will deliver all these success factors to our clients, investors, shareholders and employees,” said Scott Kapnick, CEO of HPS, in a statement.