NEW YORK & CHICAGO - BlackRock Inc. (NYSE: NYSE:BLK), the global investment management corporation, has announced an agreement to acquire the remaining shares of SpiderRock Advisors, a prominent provider of customized option overlay strategies in the U.S. wealth market.
This move comes after BlackRock's initial minority investment in SpiderRock Advisors in 2021 and is indicative of BlackRock's strategy to enhance its offerings in the separately managed accounts (SMAs) space.
The acquisition is poised to bolster BlackRock’s capabilities in SMAs, a rapidly expanding segment within the U.S. wealth industry. According to research from Cerulli Associates, the SMA market is projected to grow from $2.7 trillion in assets under management (AUM) as of the third quarter of 2023 to $4 trillion by 2026. This growth is attributed to increasing client demand for personalized investment solutions that align with individual tax situations, values, and investment objectives.
Joe DeVico, Co-Head of BlackRock's U.S. Wealth Advisory business, emphasized that the integration of SpiderRock Advisors will enable BlackRock to better serve wealth managers seeking personalized, tax-efficient portfolios.
SpiderRock Advisors, which managed approximately $4.8 billion in client assets as of February 2024, is known for its SMA strategies that concentrate on income and risk management for both single securities and diversified portfolios.
BlackRock, managing $186 billion in SMAs as of December 2023, is recognized as a leader in the SMA domain for U.S. wealth management intermediaries. The firm offers a variety of customized strategies, such as Aperio's direct indexing, actively managed fixed income, equity, and multi-asset strategies.
Eric Metz, President and Chief Investment Officer of SpiderRock Advisors, expressed enthusiasm about joining BlackRock and expanding the reach of their options management solutions to a broader range of investors.
The transaction, expected to be finalized in the second quarter of 2024, is subject to standard closing conditions. The financial impact on BlackRock's earnings is reported to be immaterial, and the financial terms of the deal have not been disclosed.
Legal counsel for the transaction was provided by Jones Day for SpiderRock Advisors and Kramer Levin Naftalis & Frankel LLP for BlackRock. This strategic acquisition is based on a press release statement and aims to extend BlackRock's influence in the wealth management sector by offering more sophisticated and personalized investment options.
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