BlackRock is buying personalized indexer Aperio Group from Golden Gate Capital for $1.05 billion in cash.
Aperio focuses on tax-optimized index equity separately managed accounts (SMAs) and customized ESG portfolios for ultra-high net worth households and institutions served by RIAs and private banks. It had over $36 billion of assets under management as of Sept. 30 and has grown these assets about 20% over the past five years.
The purchase of Aperio should increase BlackRock’s SMA assets by roughly 30% to over $160 billion, the asset manager said in a press release late Monday. BlackRock, which owns a minority stake of wealth-platform provider Envestnet, currently focuses its SMA business on tailored actively managed fixed income, equity and multi-asset strategies.
The development comes about six weeks after Morgan Stanley agreed to buy money manager Eaton Vance — which includes direct indexer Parametric — for $7 billion, creating a firm with about $4.4 trillion. It also happens seven weeks after Trian Fund Management bought 9.9% stakes in assets managers Invesco and Janus Henderson, for some $881 million in total.
As of Sept. 30, BlackRock managed some $7.8 trillion in assets, including over $2 trillion in its iShares ETFs.
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“The wealth manager’s portfolio of the future will be powered by the twin engines of better after-tax performance and hyper-personalization. BlackRock and Aperio … will bring unmatched capabilities to meet these objectives,” said Martin Small, head of BlackRock’s U.S. Wealth Advisory business, in a statement.
“The combination will bring institutional quality, personalized portfolios to ultra-high net worth advisors and will create one of the most compelling client opportunities in the investment management industry today,” Small explained.
According to Cerrulli, the U.S. retail and wealth SMA market totaled about $1.7 trillion as of late 2019 and is growing at roughly 15% a year and 35% among RIAs.
“Aperio has been honored to earn the trust of the most demanding wealth managers by always putting investors’ interests first and partnering with advisors to solve the complexities of UHNW investors through research integrity and excellence in human-centric client experience,” said Aperio co-heads, Liz Michaels and Ran Leshem, in a statement.
“With BlackRock, we have found a like-minded fiduciary firm with long-standing roots in tax-efficient indexing, a commitment to sustainable investing, and Diversity, Equity & Inclusion, and a track record of delivering consultative whole portfolio solutions to wealth management intermediaries,” they added.