The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Jonathan Guilford
NEW YORK, Dec 3 (Reuters Breakingviews) - Boss Larry Fink intensified the race against Apollo and others to capitalize on booming private markets. For the index-fund titan, it means finding content-like assets to push through its pipes. Buying a credit shop managing $150 bln helps, but only up to a point. Just ask Apple.
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CONTEXT NEWS
Asset manager BlackRock said on Dec. 3 that it had agreed to buy private credit firm HPS Investment Partners for $12 billion in an all-stock deal to expand in one of the hottest areas of investment. HPS oversees $148 billion in direct lending, asset-based finance and other similar strategies.
Under terms of the transaction, HPS owners will receive up to 13.7 million units of a BlackRock subsidiary, each of which can be exchanged for one BlackRock share. About 9.2 million units will be paid at closing, and 2.9 million in about five years. BlackRock will pay another 1.6 million units based on financial performance in five years.
BlackRock is creating a new private financing division that will be led by HPS co-founders Scott Kapnick, Scot French and Michael Patterson, who also will join BlackRock’s global executive committee.
Perella Weinberg Partners and Morgan Stanley are advising BlackRock. JP Morgan served as lead financial adviser to HPS, which also was advised by Goldman Sachs, Bank of America, Deutsche Bank, BNP Paribas and RBC Capital Markets.
(Editing by Jeffrey Goldfarb and Pranav Kiran)
((For previous columns by the author, Reuters customers can click on GUILFORD/ Jonathan.Guilford@thomsonreuters.com))
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