On a new twist from the recent trend of mutual fund companies acquiring hedge fund and other alternative investment money managers, BlackRock announced Tuesday that it is acquiring the funds-of-funds division of Quellos Group for up to $1.7 billion. The division runs funds-of-funds that invest in mutual funds, hedge funds, private equity, real estate and hybrid offerings.
Once merged with BlackRock’s existing funds, the funds-of-funds division—to be named BlackRock Alternative Advisors and overseen by Quellos CIO Bryan White—will have $25.4 billion in assets under management, making it one of the largest such platforms in the world. Quellos CEO Jeffrey Greenstein will retire but serve as an advisor during the transition period.
At the closing of the deal, scheduled for early October, BlackRock will pay Quellos $562 million in cash, $188 million in common stock and up to $970 million in cash and stock over a 3-/12-year period, contingent upon certain measures being met.
“We are extremely excited to welcome the Quellos team to BlackRock,” said Laurence D. Fink, chairman and chief executive officer of BlackRock. “We have worked with Quellos for a number of years as a sub-advisor for their clients. We have long admired the discipline with which they have built and continue to operate their alternative investment business.”