NEW YORK, Dec 11 (Reuters) - A dealmaking splurge by

BlackRock in 2024 may continue as the world's largest asset

manager is expected to opportunistically look to further expand

in private credit, real estate, infrastructure or possibly

private equity.

New York-based BlackRock announced last week plans to buy

private credit firm HPS Investment Partners for about $12

billion in a deal that BlackRock CEO Larry Fink said will allow

the companies to offer an integration of private and public

market investment products. It was BlackRock's third major

acquisition this year.

Looking ahead, BlackRock could bolster its presence in

private markets through further acquisitions, financial sources

and analysts said. Targets could include an expansion in private

credit or bulking up in private equity, positioning BlackRock to

better compete with larger players in alternative investments.

"They look at everything," said Daniel Fannon, an analyst at

Jefferies who covers BlackRock. "They are canvassing the market

for appropriate partners and asset classes that they are

relevant in."

BlackRock spent roughly $28 billion in 2024 to strengthen

its private market offerings, a strategic move that Fink views

as key to positioning the firm as a conduit for private capital

into global infrastructure projects at a time of tightening

government budgets and rising public debt.

Private credit, which involves non-bank institutions

providing loans to companies, has experienced significant growth

in recent years due to stricter regulations that have increased

the cost for traditional banks to fund higher-risk loans.

In October, BlackRock finalized its $12.5 billion

acquisition of investment firm Global Infrastructure Partners

and anticipates completing a $3.2 billion purchase of private

markets data provider Preqin by year-end.

The HPS deal will create a private credit franchise with

about $220 billion in client assets. Rival alternative asset

manager Ares Management had approximately $313.6 billion in

private credit assets under management as of Sept. 30.

Blackstone's overall credit business is about $432 billion, the

bulk of it in private credit, the firm says.

BlackRock may continue expanding in infrastructure and

private credit, said a source involved in the HPS deal,

potentially targeting smaller, complementary acquisitions to

enhance its offerings.

"BlackRock has made a very loud statement that they want to

be much bigger in private credit and in infrastructure within

private markets," said Alexander Blostein, a senior analyst at

Goldman Sachs who covers BlackRock.

A further push into private assets could also include buying

an asset to give BlackRock exposure to real estate - albeit once

the commercial market has stabilized, said one senior investment

banker.

BlackRock's alternative assets under management - including

private debt and equity - totaled approximately $320 billion as

of the end of September, less than 3% of its $11.5 trillion in

assets. BlackRock's alternative assets are dwarfed by its

holdings in low-fee products like index funds and ETFs.

Considering BlackRock's size, recent acquisitions seem to

hold greater strategic importance than asset management,

suggesting additional ventures into private markets are

possible, said Cathy Seifert, an analyst at CFRA Research.

"We've always thought of making organic and inorganic

investments in our business," BlackRock's chief financial

officer, Martin Small, said during the company's third-quarter

earnings call in October. "Inorganic is a tool that we have in

order to optimize organic growth, but we don't need M&A to meet

our organic growth targets," he said then.

BlackRock declined to comment for this story.

PRIVATE EQUITY

Private equity could be another avenue for expansion, said a

source familiar with the matter and the senior investment

banker. BlackRock has had informal conversations with private

equity firms in the past, but none have progressed beyond

preliminary stages, the banker said.

BlackRock's acquisitions have been relatively

"opportunistic" this year, said the same banker, suggesting

BlackRock could soon be chasing new targets if the circumstances

are advantageous.

Private equity, however, may be less of an immediate focus

given that the industry has struggled in recent years.

"It's just a much tougher part of the business," said

Greggory Warren, a strategist at Morningstar.

Asked about a potential expansion in private equity,

BlackRock's chief operating officer, Rob Goldstein, said on

Tuesday that the firm already has private equity capabilities.

"For the time being, when we look at where the puck is

going and we look at where clients are increasingly focused and

find allocations, we prioritize both infrastructure, that's debt

and equity, as well as private credit," he said on a panel at

the Reuters NEXT conference in New York.

BlackRock's private equity teams manage $42 billion in

capital commitments, trailing industry heavyweights such as

Blackstone, which oversees $345 billion in private equity

assets, and KKR, with $190 billion as of the end of September.

"BlackRock doesn't have quite as much (private equity) as

Blackstone and KKR, but I think they're more interested in

backfilling other parts of the business," said Warren.

Growing its secondaries business through an acquisition

would be one way to advance its private equity exposure, with

focus on one of its hottest sectors, said the senior investment

banker.

Total transaction volume in the market, where owners of

stakes in private equity funds can sell them to other investors

before the fund matures, is expected to hit a record-breaking

$140 billion this year, according to BlackRock's own website.

To be sure, the company may need to take a breather after

this year's acquisition surge.

"I imagine they'll digest some of the recent acquisitions,

then the focus turns to upcoming fundraising, product creation,

sales and distribution," said Benjamin Budish, an analyst at

Barclays.

For Mac Sykes, portfolio manager for BlackRock investor

Gabelli Funds, HPS was not BlackRock's last foray into

acquisitions but the company is under no pressure to do more

deals.

"I see them as being opportunistic with a high bar. They are

smart capital allocators," Sykes said.