Leading asset manager BlackRock (NYSE:BLK) is acquiring London-headquartered Kreos Capital to expand its $45 billion private credit business. The transaction, which will expand the company’s presence in the Europe, the Middle East, and Africa (EMEA) region, is expected to close by the third quarter of this year.
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Kreos is a growth and venture debt financing provider for more than 550 pan-European and Israeli high-growth companies in the technology and healthcare industries. Kreos has committed over €5.2 billion across more than 750 transactions in 19 countries.
As part of the transaction, a 45-person investment team from Kreos will join Blackrock and will be integrated into BlackRock’s European Private Debt platform. Kreos co-founders Mårten Vading, Raoul Stein, and Ross Ahlgren will join the BlackRock team.
The acquisition is not expected to have a significant impact on BlackRock’s earnings. The deal comes amid a general market shift towards private credit, which now stands at a valuation of $1.4 trillion. BlackRock’s recent Global Private Market Survey found that more than half of respondents plan to increase their private credit holdings in 2023.
Is BlackRock an Attractive Stock Pick?
Of the 13 analysts covering BLK stock, 10 have a Buy rating and three suggest a Hold. Overall, the stock scores a Strong Buy consensus rating. The average price target stands at $763.23, implying an upside potential of 12.5%. Shares are down 4% year-to-date.
