BlackRock Restructures Private Credit Division

BlackRock is revamping its private credit unit to bridge the gap with rivals in the quickly expanding market. according to a Bloomberg report. The new division, Global Direct Lending, will be overseen by Stephen Caron, who currently leads the European middle-market private debt division.

Raj Vig, co-head of US private capital, and Jim Keenan, BlackRock’s global head of private debt, will depart the company next year as part of the reorganization.

BlackRock has yet to surpass its smaller competitors, Apollo Global Management Inc and Ares Management Corp, which have emerged as industry leaders, despite managing $10.6 trillion in assets.

“Private credit is one of the firm’s top priorities,” said Rich Kushel, head of BlackRock’s portfolio management group, in a memo seen by Bloomberg, adding that the new structure will enhance BlackRock’s capacity to expand its capabilities and preserve the investment strategies that are distinct to each division of the company, while also fostering improved collaboration.

The creation of the direct-lending unit follows growing demand from investors, Kushel explained, with the aim being to “accelerate our ambition to be a leader in direct lending and growth debt globally.”

BlackRock currently oversees approximately $35 billion in direct lending assets. The total value of its private debt assets is $86 billion. Conversely, Apollo oversees credit assets exceeding $500 billion, while Ares maintains credit assets of more than $320 billion as of the middle of the year.