HPS's Kapnick: Private Credit's Next 30 Years Are Just Getting Started

What's New

HPS Founding Partner and CEO Scott Kapnick used his Bloomberg Invest 2026 appearance to deliver a characteristically measured but emphatic message: private credit is not in a bubble, it is in the early innings of a structural multi decade expansion. Speaking days after HPS completed its integration into BlackRock, Kapnick framed the current moment of volatility not as a crisis signal but as the natural dispersion event that separates disciplined managers from opportunistic ones. The $400 billion platform he now runs inside BlackRock, he argued, is positioned to be on the right side of that divide.

Why It Matters

Kapnick's view matters because HPS has spent 17 years operating with what he describes as deliberate conservatism: low leverage, wide origination funnels, and deep workout capability. That track record gives his optimism credibility that a growth stage manager could not credibly claim. More importantly, his framing of private credit as structurally necessary infrastructure, not a cyclical trade, carries weight at a moment when peers are trimming exposure and regulators are circling. If he is right, the current turbulence is a buying opportunity. If he is wrong, HPS has now bet its identity on that thesis inside the world's largest asset manager.

Big Picture Drivers

• Bank capital deficiency. Post GFC bank retrenchment has created a permanent structural gap between available bank capital and the economy's financing needs, a gap that private credit exists to fill.

• Government leverage overhang. Sovereign debt levels globally have consumed the traditional fiscal buffer, making private pools of capital increasingly essential for infrastructure, defense, and technology buildout.

• AI and tokenization inflection. Kapnick flagged BlackRock's Larry Fink and Rob Goldstein on tokenization as a signal that the financial system's underlying architecture is about to change, amplifying both risk and opportunity for private credit managers.

• CapEx supercycle. The simultaneous build out of AI infrastructure, energy transition, and defense capacity in the US and Europe represents a capital requirement that public markets and banks cannot meet alone.

• Geographic expansion. The private credit wave that has dominated the US and Europe is, in Kapnick's view, still nascent across Asia and broader emerging markets.

By The Numbers

• $300B to $2T: Growth in the private credit market since Kapnick entered finance in the nineties

• $40T: Marc Rowan's cited figure for the addressable market if investment grade private credit is included

• $400B: Capital base HPS is now managing inside BlackRock across lending and financial activities

• 30 to 50 years: Kapnick's projected runway for continued private credit expansion globally

• 17 years: Length of HPS's track record of conservative, low leverage portfolio construction

Memorable Quotes

• On structural necessity: "There's not enough bank capital in the world to grow the economy."

• On the pace of change: "It's certainly a big technological change, bigger than anything I think we've experienced."

• On dispersion ahead: "In a moment where maybe there is some dispersion that's going to create opportunity, I think we see opportunity for the bigger players."

• On middle market risk: "If I'm just doing middle market and then middle market goes bad, that's likely to not go well for the portfolio."

• On what will carry the day: "Conservative building on the portfolios. That's what's going to carry the day."

Key Trends to Watch

• Scale bifurcation. Kapnick was direct: smaller, niche focused managers will struggle to compete on origination breadth, workout capability, and LP relationships. Consolidation is not a possibility, it is a process already underway.

• Software stress as dispersive event. The 2021 to 2022 software lending vintage is now coming due. Managers who concentrated there will face markdowns. Those with diversified funnels will use the dislocation to widen spreads.

• Retail product scrutiny. As private credit pushes deeper into retail channels through BDCs and retirement vehicles, the next round of defaults will attract political and regulatory attention that the institutional market has so far avoided.

• Origination as the scarce resource. Kapnick echoed a theme from the broader conference: finding good assets is now the binding constraint in private credit, not capital. Platforms with global origination networks hold the structural advantage.

• BlackRock distribution flywheel. HPS's integration gives it access to BlackRock's LP base and borrower relationships at a scale no independent manager can replicate. That flywheel is, by Kapnick's own admission, still in the early innings.

The Wrap

Kapnick is playing a long game. Where peers are managing headlines around software defaults and BDC markdowns, he is making a 30 to 50 year structural argument. The subtext is clear: HPS did not sell to BlackRock for the premium alone. It sold for the origination infrastructure, the LP distribution, and the ability to commit capital at a speed and scale that defines the next era of private credit. Whether the BlackRock integration delivers on that promise, or whether the complexity of embedding a $400 billion boutique inside a $10 trillion asset manager creates its own friction, is the real story to watch over the next 24 months.