BlackRock Inc. (BLK) is at risk of an unusual internal conflict as Aston Martin Lagonda Global Holdings Plc (AML.L) explores a potential debt restructuring that has drawn in two separate divisions of the asset management giant.
On one side of the dispute are BlackRock’s bond funds, some of which fall under the oversight of global fixed income chief investment officer Rick Rieder, who is part of a creditor steering committee formed to present a united front to Aston Martin.
The steering committee was organized specifically to give creditors leverage if Aston Martin needed to discuss a refinancing of its debt or raise additional liquidity from outside sources.
On the other side, Aston Martin has been in separate talks with HPS Investment Partners, the private credit specialist founded by Scott Kapnick, Scot French, and Michael Patterson that BlackRock acquired roughly a year ago.
HPS is among the funds farthest along in discussions with Aston Martin about raising new money, according to people with knowledge of the matter who asked not to be named because the talks are private.
The situation represents a rare instance in which two sides of the same firm’s credit business find themselves on opposite ends of a negotiation, a dynamic that is almost unprecedented in asset management.
A representative for BlackRock declined to comment on the matter, while Aston Martin did not respond to requests for comment from Bloomberg.
The financing maneuver being discussed is known as a drop-down, a structure that could move assets out of the reach of existing lenders and prove costly to the creditors already holding Aston Martin bonds.
Aston Martin bonds fell by as much as 10 cents on the dollar last week, hitting their lowest level on record, after Bloomberg first reported on the ongoing debt talks with potential new lenders including HPS.
HPS, which in 2024 invested in Aston Martin’s Formula One team, still maintains separate midtown headquarters in New York even after its acquisition by BlackRock was completed.
In a filing with the Securities and Exchange Commission in March, HPS flagged the potential for exactly this type of internal tension, warning that BlackRock “currently has, and may in future have, other business units that compete with HPS or seek investment opportunities that are appropriate for the HPS funds.”
BlackRock’s own SEC disclosure acknowledged that potential conflicts of interest between its funds could arise, saying the firm would mitigate them through “independent investment decisions,” with each account acting in its own best interest.
The filing also outlined options BlackRock could consider in conflict situations, including abstaining from exercising voting rights, remaining passive in a restructuring, or “refraining from making, or disposing of, investments giving rise to such conflicts.”
As the asset management industry continues consolidating, with larger firms acquiring smaller specialists, internal clashes like the one unfolding at Aston Martin are widely expected to become more frequent across the sector.
Aston Martin, the luxury vehicle maker based in Gaydon, England, has struggled to generate cash consistently since going public in 2018, with product delays, weak demand from China, and US tariffs all weighing heavily on its financial performance in recent periods.
