MutualFundWire.com: BlackRock Ties the Knot With an Eight-Legged Ally

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Thursday, May 2, 2024

BlackRock Ties the Knot With an Eight-Legged Ally

Larry Fink and his team have wrapped up a three-year courtship with an Illinois firm that specializes in options overlay strategies for separately managed accounts (SMAs).

Laurence D. "Larry" Fink
BlackRock
Chairman, CEO

Yesterrday, Joe DeVico, co-head of the U.S. wealth advisory business at BlackRock [profile], and Eve Cout, head of the U.S. wealth advisory business' portfolio design and solutions pillar, confirmed that the New York City-based asset manager has closed on its planned acquisition of Chicago-based SpiderRock Advisors, LLC. SpiderRock (which had about $4.8 billion in AUM as of February) will become part of BlackRock's U.S. wealth advisory unit (which had $186 billion in SMAs as of December). Per a March 15 form ADV, SpiderRock has 38 employees (not counting clerical staff).

Pricing and terms of the deal, which was unveiled on March 8, have not been publicly disclosed. Jones Day and Kramer Levin Naftalis & Frankel LLP provided legal counsel on the deal to SpiderRock and BlackRock, respectively.

SpiderRock's most recent form ADV reveals that, prior to this latest BlackRock deal, SpiderRock was principally owned by two of the firm's senior leaders: Eric Metz, president and chief investment officer, who held a stake of between 25 and 49 percent; and George Papa, CEO, who indirectly also held between 25 and 49 percent. BlackRock invested in SpiderRock in 2021, taking a minority stake, and prior to the deal that closed yesterday BlackRock indirectly held between 10 and 24 percent.

Metz describes the BlackRock deal as a way for the SpiderRock team to "broaden access to innovative option management solutions."

"Together, we aim to empower more advisors in delivering tailored option overlay strategies," Metz states.

DeVico describes the SpiderRock deal as "further solidifying BlackRock's leadership in SMA solutions." Cout adds that the deal "complements BlackRock's existing SMA product portfolio."

"This strategic move expands on our commitment to meeting the evolving needs of wealth managers and their clients," DeVico states.

"The completion of this acquisition further enhances our ability to provide wealth manages with an extensive array of customization capabilities," Cout states. "With SpiderRock's advanced option overlay capabilities and derivatives expertise, we are positioned to deliver even greater value to our clients, helping them towards achieving better after-tax performance and personalization."

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