Acquirer: BlackRock Private Equity Partners
Acquired Unit: Swiss Re Private Equity Partners
Combined PE Commitments: $15 Billion
Deal Price, Terms: Not Available
Leader of Combined Group: Russell Steenberg
BlackRock’s private equity fund of funds group was started in 1999; Swiss Re’s was launched in 1995. The combined group’s $15 billion in assets are not quite large enough to crack the top-ten list of private equity fund of funds managers, which is led by The Carlyle Group’s AlpInvest Partners, which oversees more than $50 billion in private equity fund of funds.
The combined business will operate in four cities: Zurich, Hong Kong, New York and Bratislava, and for BlackRock, the acquisition expands its footprint in Asia and Europe. It will be led by Russell Steenberg, the current head of BlackRock Private Equity Partners. The deputy head will be Christian Hinze, currently the chief executive of the Swiss Re unit.
Matthew Botein, who heads alternative investments for BlackRock, said in a statement, “In an environment where yields are low and volatility is high, clients around the world are embracing alternatives, which offer higher return potential and the ability to mitigate risk. We are thrilled to be welcoming Swiss Re Private Equity Partners to BlackRock and believe its well-respected capabilities enhance our abilities to deliver innovative solutions to our global client base.”
Similar to other large fund of funds firms, the combined BlackRock unit will invest in primary funds, secondaries and co-investments, and the firm said it did not anticipate any immediate change in strategy.
Besides private equity funds of funds, BlackRock also recently launched a primary private equity fund business. Last year, BlackRock hired three founders of Merrill Lynch’s private equity arm to launch the unit, which it labeled the only remaining gap in its diverse offerings of alternative investments. The firm said it has erected a firewall between its primary fund business and the private equity fund of funds business to prevent any conflicts of interest.
BlackRock’s alternatives division, which oversees $110 billion in assets, is also a big player in hedge funds, hedge funds of funds, real estate funds, commodities, currencies and infrastructure.
Deal terms were not disclosed, but a press release said the transaction was likely to close in the third quarter.