BlackRock Takes $600M+ Loss as Private Equity Bet Goes South; Alacrity Sets Q1 2025 Close for Restructuring
- Editor
- Jan 9
- 2 min read
What's Happening: BlackRock's private equity division is taking a total loss on its controlling stake in Alacrity, an insurance outsourcing company, as reported by the Financial Times. The company is being handed over to its lenders under a "strategic transaction" that will close in Q1 2025, as reported by Alacrity's press release.
The Key Moves:
Private credit lenders including Antares Capital, Blue Owl, KKR, and Goldman Sachs Asset Management are taking control of Alacrity
The restructuring converts $1.5B in existing debt into a new $450M loan and $250M in preferred equity
Senior lenders will own 90% of the restructured company, with Goldman Sachs Asset Management holding the remaining 10%
BlackRock's equity investment, made in February 2023, will be completely wiped out
Company plans to pursue growth through technological innovation and strategic acquisitions
By The Numbers:
$600M+: BlackRock's lost equity investment
$1B: Amount of senior debt at time of BlackRock's investment
$500M: Additional junior debt held by Goldman Sachs
$43B: Total client assets managed by BlackRock's private equity teams
33%: Internal rate of return of the fund through early 2024
Key Quotes:
"Today's announcement marks a significant stride forward," says Alacrity CEO Jim Pearl. "We are building a stronger financial foundation that positions Alacrity Solutions to continue serving as a leader in the claims management industry."
"This strategic transaction will reinforce Alacrity Solutions' financial foundation and accelerate its trajectory of growth and success," said David Barse and Mike Wartell, Independent Directors.
The Bottom Line: This loss comes at an awkward time for BlackRock, which has been aggressively expanding its alternative investments business. The company recently spent $28B to acquire players in infrastructure, private credit, and private markets data. The Alacrity failure also signals broader challenges in the private credit market as higher interest rates put pressure on heavily indebted companies. Meanwhile, Alacrity, based in Fishers, Indiana, continues operating as one of North America's largest independent insurance claims management services providers, offering property, auto, and casualty claims adjustment services, staffing solutions, temporary housing services, and managed repair network services.
Kommentare