BlackRock CFO Martin Small Says 'We've Never Shied Away From Taking Big Bets' – Here's What They Look For

BlackRock is on a spending spree. In November, the asset management giant dropped $12 billion to buy private credit firm HPS Investment Partners. And that's just one deal this year. They also grabbed data firm Preqin for $3.2 billion and private-equity powerhouse Global Infrastructure Partners (GIP) for $12.5 billion.

"We've never shied away from taking big bets," BlackRock CEO Larry Fink said recently.

It's all part of the strategy. BlackRock is building its dominance in private markets, a space it's been targeting for years.

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"Inorganic has always been a fundamental part of the BlackRock strategy," CFO Martin Small said at the Goldman Sachs Financial Services Conference, as reported by Business Insider.

BlackRock doesn't just go for anything, though. Small broke down the top three things they look for in a deal. Let's dive in.

1. Cultural Fit

This is number one. No exceptions.

"We have to acquire the kind of people aligned to a ‘One BlackRock' culture and mission," Small said.

Translation: They want teams that play well together. Before closing the HPS deal, Small and BlackRock leadership met with HPS execs, including cofounders Scott Kanick, Mike Patterson and Scot French.

"They're founders. Larry Fink and Rob Kapito are the founders. We're client-centered firms," Small explained.

Apparently, it clicked. The HPS leaders will now run BlackRock's private financing solutions unit and sit on its executive committee.

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2. Enriching the Platform

BlackRock doesn't just buy to expand. They buy to get better.

"It's not just about new capabilities. It's about new capabilities that make the ones you have better," Small said.

The HPS deal is a perfect example. HPS focuses on the upper-middle market for direct lending, while BlackRock has been more active in the middle market. Now, together, they can cover more ground.

"That'll strengthen origination, our ability to do more transactions, meet borrowers where they are," Small added.

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3. Topline Results

Any acquisition has to have a big impact. HPS manages $148 billion in client assets, so it fits the bill.

"We'll now have a $220 billion private credit business at BlackRock," Small said. "We'll be very scaled in that regard."

The Big Picture

BlackRock's moves show that it's not just about passive investing anymore. It's betting big on private markets and its acquisitions are all about synergy and scale.

If you're watching how the world's largest asset manager evolves, these deals are worth watching. As Small puts it, "We're client-centered, we believe in scale and we believe in global." Sounds like BlackRock isn't slowing down anytime soon.

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