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NEW YORK - BlackRock, Inc. (NYSE:BLK), a prominent player in the Capital Markets industry with a market capitalization of $167.65 billion, announced Monday it has entered into a definitive agreement to acquire ElmTree Funds, a net-lease real estate investment firm with $7.3 billion in assets under management as of March 31, 2025. According to InvestingPro data, BlackRock’s stock is trading near its 52-week high of $1,084.22, reflecting strong investor confidence in the company’s growth strategy.
The acquisition will be paid primarily in stock, with potential additional consideration based on ElmTree’s performance over the next five years. Financial details beyond this were not disclosed in the company’s press release statement. BlackRock brings significant financial strength to this transaction, with a healthy current ratio of 1.97 and strong revenue growth of 14.23% over the last twelve months.
Founded in 2011, ElmTree specializes in single tenant, build-to-suit real estate assets across the commercial net-lease sector. The firm currently manages 122 properties across 31 U.S. states from six office locations.
Upon closing, ElmTree will be integrated into BlackRock’s Private Financing Solutions (PFS) platform, which was created through BlackRock’s combination with HPS Investment Partners.
The transaction aims to expand PFS’s real estate offerings and market presence as an owner-operator. ElmTree’s expertise in commercial real estate will complement HPS’s credit investment capabilities, positioning the combined platform to deliver investment solutions focused on long-term, stable income.
"Structural shifts in the real estate sector are creating new opportunities for private capital," said Scott Kapnick, Chairman of PFS Executive Office and CEO of HPS, in the press release.
James Koman, ElmTree’s CEO and Founder, will continue to lead the firm’s investment strategies after the acquisition. "The net lease market is estimated at $1 trillion, and our continued belief in the industrial build-to-suit model is rooted in the mission-critical nature of this asset class," Koman stated.
The transaction is expected to close in the third quarter of 2025, subject to regulatory approvals and customary closing conditions.
Goldman Sachs & Co. LLC served as financial advisor to HPS, while Berkshire Global Advisors advised ElmTree Funds on the transaction.
In other recent news, Jio BlackRock Asset Management successfully raised over $2.1 billion in its first fund offering, which included three cash or debt mutual fund schemes. This joint venture between Jio Financial Services and BlackRock attracted investments from more than 90 institutional investors and over 67,000 retail investors. Meanwhile, BlackRock Inc (BVMF:BLAK34). has seen a growing interest from clients to diversify away from U.S. markets, with over 20% planning to reduce their exposure, according to a survey discussed by Elaine Wu, head of Asia-Pacific investment and portfolio solutions. In another development, Moody’s Ratings affirmed BlackRock’s senior unsecured Aa3 ratings, changing the outlook to stable from negative, following the acquisition of HPS Investment Partners. This acquisition positions BlackRock among the top five private credit franchises globally, managing approximately $190 billion in private debt. BlackRock also issued a warning about the potential impact of increasing U.S. government debt on long-dated Treasuries and the dollar, suggesting a need for diversification beyond U.S. government bonds. Additionally, BlackRock launched the iShares Texas Equity ETF, targeting companies headquartered in Texas, which is now the eighth largest economy globally. This ETF aims to provide investors with exposure to nearly 200 U.S. companies based in Texas across various sectors.
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