The acquisition is expected to expand BlackRock’s minority investment in SRA, made in 2021, and strengthen its commitment to separately managed accounts (SMAs), one of the fastest-growing product segments in the US wealth industry
BlackRock to acquire SpiderRock Advisors. (Credit: Sasun Bughdaryan on Unsplash)
US-based investment management company BlackRock has agreed to acquire the remaining equity stake in SpiderRock Advisors (SRA), an asset management firm in the US wealth market.
SRA is engaged in providing personalised option overlay strategies to investors, using a combination of its technology and comprehensive derivative management expertise.
The company, which manages around $4.8bn in client assets, helps financial advisors and institutions to easily add option overlay strategies to their portfolios.
The proposed acquisition is expected to be completed in Q2 2024, subject to customary closing conditions.
BlackRock US Wealth Advisory business portfolio design and solutions pillar head Eve Cout said: “SRA’s highly complementary solutions can provide advisors with a comprehensive suite of customisation capabilities that help solve clients’ unique challenges, such as income generation, downside protection, and tax efficiency through the use of options.”
SpiderRock Advisors president and chief investment officer Eric Metz said: “We are thrilled to fully join the BlackRock team, and to broaden access to SpiderRock Advisors’ options management solutions for both taxable and tax-exempt investors.
“Innovative advisors and investors understand the value of options in their portfolios to better manage risk as we navigate a challenging capital markets landscape.”
BlackRock said that the acquisition expands its minority investment in SRA, made in 2021, and strengthens its commitment to separately managed accounts (SMAs).
SMAs are one of the fastest-growing product segments in the US wealth industry, which are projected to grow from $2.7tr to $4tr by 2026, according to Cerulli Associates.
Jones Day served as legal counsel for SpiderRock Advisors, while Kramer Levin Naftalis & Frankel served as legal counsel for BlackRock, on this transaction.
BlackRock US wealth advisory business co-head Joe DeVico said: “By giving BlackRock more SMA capabilities, this acquisition will enable us to meet growing demand from wealth managers for personalized, tax-efficient portfolios.
“We look forward to fully integrating SRA’s team and capabilities into our U.S. Wealth Advisory business and to further expanding our offerings in SMA solutions.”