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Two of the biggest names in private credit just became Hollywood landlords. BlackRock’s HPS Investment Partners and Brookfield’s Oaktree Capital Management, acting as part of a creditor group, have seized control of MBS Group, a major provider of production equipment and studio infrastructure to the entertainment industry, through a debt-for-equity restructuring that wiped out up to $900 million in debt.
The takeover also includes a fresh $40 million injection meant to stabilize MBS and position it for growth. Former owners Hackman Capital Partners and Affinius Capital have been ousted from their positions entirely.
From creditors to owners
MBS Group services clients across more than 600 sound stages globally, including well-known facilities like Silvercup Studios and Television City. Hackman Capital had acquired MBS for $650 million from Carlyle back in 2019, riding what seemed like an unstoppable wave of content spending fueled by the streaming wars.
That wave crashed. Production spending began contracting in 2022 as major studios pulled back from the spend-at-all-costs approach that had defined the streaming boom’s peak years.
For HPS, this deal arrives during a period of rapid institutional growth. BlackRock acquired HPS in a $12 billion all-equity transaction, folding one of the largest independent private credit platforms into the world’s biggest asset manager.
Hollywood’s supply chain under pressure
The post-2022 correction hit particularly hard because it coincided with the 2023 writers’ and actors’ strikes, which brought US production to a near standstill for months. Even after the strikes ended, spending didn’t snap back. Studios had learned to operate leaner, and the economics of streaming proved far less forgiving than the initial land-grab suggested.
MBS, sitting on a capital structure built for peak demand, found itself unable to service the debt load. A company acquired for $650 million just a few years earlier needed its creditors to effectively take a loss on the face value of their loans in exchange for ownership.
Private credit’s expanding footprint
The $40 million in fresh capital committed by the creditor group is specifically earmarked to stabilize the business and fund growth, not to pay off other obligations or wind things down.
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