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The deal to buy ElmTree Funds, which has $7.3 billion in assets under management, will boost New York-based BlackRock鈥檚 move into the private credit market, or financing made by non-bank lenders, according to a release.

ElmTree will work alongside private credit investor HPS Investment Partners on BlackRock鈥檚 new private financing solutions arm.

鈥淓lmTree has the team, expertise, and relationships that will help drive growth and deliver differentiated investment solutions,鈥� Scott Kapnick, chairman of BlackRock鈥檚 private financing solutions, said in a statement.

Longtime real estate executive Jim Koman started ElmTree in 2011. His firm focuses on commercial real estate, primarily build-to-suit industrial properties. Its holdings span 31 states.

Koman鈥檚 new title under BlackRock will be global head of net lease.

鈥淭he opportunity to work with world-class organizations like HPS and BlackRock was just too good to pass up, creating a synergy for ElmTree that we couldn鈥檛 replicate with other global partners,鈥� Koman said in a statement.

ElmTree is expected to be paid in stock with the potential for additional compensation pending the firm鈥檚 performance over the next five years, according to a release. Additional financial terms of the deal were not disclosed.

Most recently, ElmTree developed and built Clayton鈥檚 newest office buildings, which are home to industrial technology giant Emerson, manufacturing technology firm Barry-Wehmiller Cos. and Midwest BankCentre.

Skadden, Arps, Slate, Meagher & Flom, Fried, Frank, Harris, Shriver & Jacobson, and Sidley Austin LLP serve as legal counsel to BlackRock and HPS.

Goldman Sachs & Co. served as financial advisor to HPS. Berkshire Global Advisors served as financial adviser and Kirkland & Ellis LLP served as legal counsel to ElmTree Funds.