Blackstone has agreed to finance the acquisition of HSBC Holdings Plc’s A$36 billion ($25 billion) Australian home loan portfolio, in what the firm described as the world’s largest residential mortgage portfolio transaction.
The investment will be made by funds managed by Blackstone Credit & Insurance, Blackstone Tactical Opportunities and Blackstone Real Estate Debt Strategies, the alternative asset manager said Friday (July 31). Financial terms were not disclosed.
The portfolio will be acquired by Virgo BidCo, wholly owned by funds managed by affiliates of Blackstone.
The deal underscores Blackstone’s growing push into asset-based finance and private credit in Asia-Pacific, where institutional investors are increasingly deploying capital into large-scale financing transactions backed by residential mortgages and other real-world assets.
“International expansion is a major priority for our private credit business,” said Dan Leiter, head of international at Blackstone Credit & Insurance, adding that the transaction reflects its ability to provide large, complex financing solutions for financial institutions. “This marquee investment is a testament to the power of our franchise and our conviction in the growing opportunities in credit across Asia.”
Pepper Money will manage the loan portfolio following completion of the transaction. The Australian non-bank lender will work with Blackstone to oversee the transition from HSBC and continue servicing borrowers.
Mike Culhane, head of international business development for asset-based finance at Blackstone Credit & Insurance, said the firm was investing in a high-quality Australian mortgage portfolio while supporting a smooth transition for HSBC customers and maintaining competitively priced home loans.
The transaction is subject to regulatory approvals.
The deal adds to Blackstone’s nearly two decades of investing in Australia and highlights the increasing role of private capital in providing financing solutions to banks seeking to optimise their balance sheets. It also reflects continued growth in Blackstone’s private credit platform, one of the firm’s fastest-growing businesses as institutional investors increase allocations to private debt amid higher interest rates and tighter bank lending.
