Latest acquisition adds $7.3 billion in assets, expands industrial property reach
BlackRock Inc., the world’s largest asset manager, is continuing its expansion into private markets – this time with a deal to acquire ElmTree Funds, a commercial real estate investment firm specializing in built-to-suit industrial properties for single-tenant renters.
The acquisition adds $7.3 billion in assets under management to BlackRock’s portfolio and will fold ElmTree into the company’s newly formed Private Financing Solutions platform, which was launched following BlackRock’s recent $12 billion acquisition of HPS Investment Partners.
Payment for ElmTree will be primarily in stock, with the potential for additional payouts depending on ElmTree’s performance over the next five years, BlackRock said in a statement Monday. While the company did not disclose the total purchase price or further financial terms, the deal is expected to close within three months, pending regulatory approval.
ElmTree currently leases over 250 commercial properties across the US, with a focus on long-term, single-tenant leases in the industrial sector, a resilient segment in the commercial real estate market.
“Structural shifts in the real estate sector are creating new opportunities for private capital,” said Scott Kapnick, CEO of HPS and chairman of BlackRock’s Private Financing Solutions unit.
This transaction represents another step in BlackRock CEO Larry Fink’s long-term strategy to diversify the firm’s offerings beyond traditional stock and bond portfolios, targeting private real estate, infrastructure, and credit markets.
“The future standard portfolio may look more like 50/30/20 — stocks, bonds, and private assets like real estate, infrastructure, and private credit,” Fink wrote in his April 2025 shareholder letter, emphasizing the shift away from the classic 60/40 investment model.
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This transaction also follows the finalization of BlackRock’s acquisition of HPS on July 1, which brought with it Acra Lending, an alternative mortgage lender. That $12 billion deal, first announced in December 2024, closed last month. Acra told Morningstar DBRS that it expects no operational changes, aside from becoming part of the BlackRock-managed funds structure.
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