NEW YORK (HedgeWorld.com)–BlackRock Inc. agreed to buy a majority interest in HPB Management LLC, a hedge fund of funds manager run by Howard P. Berkowitz.
Terms of the deal, expected to close April 30, were not disclosed.
Mr. Berkowitz and HPB, with US$150 million under management, will be the centerpiece of BlackRock’s fledgling funds of funds effort. Mr. Berkowitz, who will be a managing director and chief executive for BlackRock’s hedge funds of funds operation, has run a hedge fund of funds for HPB since January of 2000. And before that, he managed an equity hedge fund for HPB and also co-founded Steinhardt Fine Berkowitz & Co. in 1967 with Michael Steinhardt.
BlackRock mainly is known in the hedge fund world for its US$1.5 billion in fixed-income hedge funds. But the firm in September bought Cyllenius Capital Management LP, Boston, giving the firm its first equity hedge fund Previous HedgeWorld Story.
BlackRock agreed to pay US$1.9 million in upfront payments plus contingency payments due this coming September and January for Cyllenius, according to BlackRock’s annual report. At the time, Cyllenius managed about US$100 million.
BlackRock, which is publicly traded and roughly 80% controlled by PNC Bank, oversees US$273 billion in total. Its alternative assets under management grew to U$5.4 billion in the first quarter, up from year-end assets of US$5.3 billion, but down from a year earlier when assets were US$5.5 billion.
BlackRock’s fixed-income hedge fund portfolios began 2003 and finished 2002 on a positive note, with returns improving after some tough months in 2002. BlackRock had taken losses earlier in the year from its yield curve positioning, increased volatility and corporate credit events, the annual report states.
In addition, BlackRock Tuesday said its net income in the first quarter ended March 31 was US$35.3 million, a 12% increase from the US$31.4 million earned a year earlier and a 4% increase from fourth quarter 2002 earnings of US$33.8 million.