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BlackRock, which oversees more than $3.6 trillion in assets worldwide, is set to start its own private equity group, hiring three founders of Merrill Lynch’s private equity arm to help it become a player in the last alternative area where BlackRock lacked a direct presence.
The new private equity group will be part of BlackRock’s alternative investment division, which manages some $115 billion in assets, already one of the country’s largest alternative asset managers. Although the firm offers private equity through funds of funds, today’s announcement trumpets the firm’s intention to create its own branded private equity funds.
“This particular business was the most important gap in the alternatives portfolio,” said Robert Kapito, BlackRock’s president, in a written statement. BlackRock’s Alternative Investors division also offers hedge funds, hedge funds of funds, real estate, opportunistic investment vehicles, commodities and currencies.
The three Merrill executives hired to launch the new BlackRock group are Nathan Thorne, former chairman and president of Merrill Lynch Global Private Equity, Mandakini Puri, its former chief investment officer, and George Bitar, a former co-head of its North America team. All three are set to be managing directors at BlackRock. At Merrill, they were involved in such notable deals as HCA and Hertz.
In addition to Thorne, Puri and Bitar, BlackRock has hired six more people for the group, a number that is set to grow to 20 before the end of the year, according to a BlackRock spokeswoman, Bobbie Collins.
To address any potential for conflicts of interest with access to confidential information about portfolio companies, BlackRock aims to erect a wall between the firm’s fund of funds group and its new private equity arm, according to Collins.