Blackrock (NYSE: BLK) to acquire Elmtree funds for $7.3 billion in assets

BlackRock Inc. (NYSE: BLK) announced it has entered into a definitive agreement to acquire ElmTree Funds, a net-lease real estate investment firm with $7.3 billion in total assets under management as of March 31, 2025.

The upfront consideration will be paid primarily in stock, with potential for additional consideration based on ElmTree’s performance over the next five years. Additional financial details were not disclosed.

Founded in 2011, ElmTree focuses on single tenant, build-to-suit real estate assets across the commercial net-lease sector. The firm operates six office locations and holds investments in 122 properties across 31 U.S. states.

Upon closing, ElmTree will be integrated into Private Financing Solutions, the platform created through BlackRock’s combination with HPS Investment Partners. ElmTree CEO and Founder James Koman will continue to lead the ElmTree investment strategies.

“The net lease market is estimated at $1 trillion, and our continued belief in the industrial build-to-suit model is rooted in the mission-critical nature of this asset class,” Koman said in a statement.

Scott Kapnick, Chairman of PFS Executive Office and CEO of HPS, said the combination will position the platform to capture opportunities in the real estate sector for clients.

The transaction is expected to close in the third quarter of 2025, subject to regulatory approvals and customary closing conditions.

Goldman Sachs & Co. LLC served as financial advisor to HPS, while Berkshire Global Advisors advised ElmTree Funds. Multiple law firms provided legal counsel to both sides of the transaction.