Blackrock is buying HPS, a private credit company, for $12bn

BlackRock Inc. agreed to buy HPS Investment Partners in an all-stock deal valued at about $12 billion that would propel the world's largest asset manager into the ranks of the largest private lenders.

HPS founders Scott Kapnick, Scot French and Michael Patterson will lead a new private finance solutions business unit at BlackRock, BlackRock said in a statement Tuesday.

"Combining the scale, capabilities and expertise of the HPS team, BlackRock will offer clients a solution that seamlessly blends listing and private assets," BlackRock CEO Larry Fink said in a statement, according to Bloomberg.

The deal is subject to regulatory approval and is expected to close in the middle of next year. That would leave BlackRock, which has $11.5 trillion under management, with nearly $600 billion in alternative assets. About a quarter of the deal price will be paid over five years, with more BlackRock shares likely to be paid depending on performance. The deal also includes up to $675 million in retention packages for HPS employees.

Mr Fink has spent the past year trying to turn the company, the largest listed manager of stocks and bonds, into a powerhouse in pensions, insurance companies, sovereign wealth funds and private assets.

With HPS and its previous acquisition of Global Infrastructure Partners, BlackRock has made two of the largest acquisitions of alternative asset managers ever in less than a year. Blackrock's $12.5 billion acquisition of Global Infrastructure Partners closed in October.