Important points
- BlackRock announced Friday that it will acquire the remaining stake in asset management firm SpiderRock Advisors.
- The world's largest asset manager bought a minority stake in Spider Rock in 2021 and plans to acquire the remaining stake in the future.
- SpiderRock managed about $4.8 billion in assets as of last month and plans to expand BlackRock's services with separately managed accounts.
- Financial terms of the deal were not disclosed.
BlackRock (BLK) on Friday announced an agreement to acquire the remaining shares of SpiderRock Advisors and plans to expand its separately managed account (SMA) services.
The world's largest asset manager first bought a minority stake in Spider Rock in 2021 and had about $4.8 billion in assets under management as of February.
Joe Devico, co-head of BlackRock's U.S. wealth advisory business, said: “This acquisition provides BlackRock with even more SMA capabilities for wealth managers seeking tax-efficient portfolios for individuals. “We will be able to meet the growing demand from companies.”
SMAs are one of the fastest growing segments of the U.S. wealth management industry, and financial advisors are expected to rely more on them over the next year, according to a recent Escalent study. Citing research from Cerulli Associates, BlackRock expects SMA's assets under management (AUM) to grow from $2.7 trillion in Q3 2023 to $4 trillion by 2026.
BlackRock had an estimated $186 billion in SMA under management as of December, and the SpiderRock acquisition is expected to increase that number. Compared to pooled instruments like mutual funds and exchange-traded funds (ETFs), SMAs can offer greater customization and some tax benefits, but they also come with higher account minimums. There is a possibility.
“Innovative advisors and investors are discovering the value of portfolio options to better manage risk as they navigate difficult capital market conditions,” said Eric Metz, president and chief investment officer at SpiderRock. “We look forward to benefiting from BlackRock's global reach and deep industry.” We want to help more advisors deliver tailored option strategies to their clients, empowering them to achieve their after-tax investment goals. ”
SpiderRock is the latest in a series of deals BlackRock has announced already this year, including several acquisitions that expand its holdings in the infrastructure space.
The deal is expected to close in the second quarter of this year. Financial terms were not disclosed, but BlackRock said “the impact of the transaction would not be material” to the company's earnings.
BlackRock stock rose 0.5% to $836.12 on Friday, and is up about 4.5% year-to-date.
