BlackRock to acquire credit manager Kreos Capital

The deal will see the Kreos investment team join BlackRock and will expand the asset manager’s risk/return offering in private credit.

Global asset manager BlackRock has announced plans to acquire specialist private debt manager Kreos Capital.

The firms have reached an agreement for BlackRock to acquire full control of Kreos, which provides growth and venture debt funding for the technology and healthcare sectors.

BlackRock said the deal will enhance its position as a credit asset manager and provide its clients with a broader range of private markets investment products. It added that Kreos will complement its existing credit business with an experienced investment team with a long-term track record.

In a statement, Stephan Caron, head of EMEA private debt at BlackRock, said: “Current market dynamics have made private credit an attractive asset class as investors focus on its income generation, low volatility, portfolio diversification and its low defaults versus public markets. The addition of this high-quality team, with an excellent track record across multiple market cycles, creates an opportunity for BlackRock to offer a larger proportion of the risk/return spectrum to investors globally.”

Kreos Capital was founded in 1998 by Raoul Stein and Ross Ahlgren and has invested more than €5.2 billion across 19 countries. It is headquartered in London and has a 45-person team, which will join BlackRock as part of the deal. The team will integrate into BlackRock’s European Private Debt platform and the existing Kreos leadership team will continue to lead the execution of its investment strategies.

Kreos is currently raising its Kreos Capital VII which launched in December 2021 with a target of €1.2 billion. Sources close to the firm told Private Debt Investor that the fund has already secured more than €1 billion and is expecting to exceed its target.

The deal is expected to close in Q3 2023 subject to regulatory approval. Financial details of the acquisition were not disclosed but BlackRock stated “the financial impact of the transaction is not material to BlackRock earnings”.

Moelis & Company acted as financial adviser on the deal while Goodwin Procter London provided legal advice to Kreos Capital. Skadden, Arps, Slate, Meagher & Flom provided legal advice to BlackRock.