BlackRock Dives Further Into Private Credit With Tennenbaum Capital Acquisition

Los Angeles-based Tennenbaum Capital Partners, known for direct lending and special situation credit, will augment BlackRock’s existing credit offerings.

BlackRock headquarters in New York (Victor J. Blue/Bloomberg)

BlackRock headquarters in New York

(Victor J. Blue/Bloomberg)

The world’s largest asset manager is expanding its reach in alternative credit markets.

BlackRock announced Tuesday evening that it had agreed to acquire Tennenbaum Capital Partners, a $9 billion asset manager focused on direct lending and special situation credit opportunities.

Since its founding in 1999, TCP has invested roughly $22 billion across more than 560 companies, according to the announcement.

Though BlackRock has a private credit offering, it is better known for more traditional bond funds. As of March 31, BlackRock managed $6.3 trillion, including $570 billion in institutional fixed income assets, according to the firm’s latest earnings report. Its global credit business had $80 billion under management as of the end of last year, according to a person familiar with the matter.

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David Blumer, global head of BlackRock Alternative Investors, said in a statement that the acquisition of TCP was the next step in the firm’s plan to build out its alternatives business. His colleague Tim O’Hara, BlackRock’s global co-head of credit, also noted a growing demand for private credit, as investors seek diversification and more attractive returns.

“This acquisition will enhance our ability to deliver clients private credit solutions that meet their investment objectives across a range of risks, liquidity, and geographies,” O’Hara said in the company statement.

Under the planned acquisition, Los Angeles-based TCP will become a wholly-owned subsidiary of BlackRock, retaining its 80-person team, including firm partners Lee Landrum, Michael Leitner, Howard Levkowitz, Philip Tseng, and Rajneesh Vig.

“We are focused on building a private credit business that seizes on long-term secular trends to deliver for clients the best results across risk spectrums and market cycles,” said James Keenan, global co-head of credit at BlackRock, in the statement. “The acquisition of TCP accelerates our growth plans and augments our position as a leading credit asset manager.”