BlackRock, Inc. and Quellos Group, LLC have entered into a definitive agreement under which BlackRock will acquire the fund of funds business of Quellos for up to $1.7 billion.
The combined business will comprise one of the largest fund of funds platforms in the world, with over $25.4 billion in assets under management. Products, including hedge, private equity and real asset fund of funds, as well as specialty and hybrid offerings, are managed on behalf of institutional and individual investors worldwide.
Under the terms of the transaction, which has been approved by the board of directors of BlackRock, Quellos Group, LLC will receive at closing $562 million in cash and $188 million in BlackRock common stock.
In addition, Quellos Group, LLC may receive up to an additional $970 million in cash and stock over three and a half years contingent on certain measures. A substantial portion of after-tax cash proceeds will be reinvested for 10 years in products managed by the fund of funds investment professionals.
“We are extremely excited to welcome the Quellos team to BlackRock,” says Laurence D. Fink, BlackRock’s chairman and CEO. “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.”