BlackRock Boosts SMA Capabilities With Stake in SpiderRock Advisors

BlackRock’s SMA franchise, which specializes in providing customized actively managed fixed income, equity, and multi-asset strategies, managed over $190 billion in SMAs as of March 31, 2021. It expects the venture with SpiderRock Advisors will help expand the breadth of those  capabilities.

“BlackRock continues to invest to equip wealth managers with innovative solutions that support the twin objectives of better after-tax performance and personalization,” said Martin Small, Head of BlackRock’s U.S. Wealth Advisory business. We are eager to help advisors access SpiderRock Advisors’ capabilities to help them build tax-efficient, highly customizable portfolios that can generate income and manage risk for their clients.”

Eric Metz, president and chief investment officer of SpiderRock Advisors, said in a statement that “between potential tax reform, historically low interest rates, and volatile equity markets, options-based strategies and solutions can often solve client objectives more efficiently than conventional allocations and techniques.”

The U.S. retail and wealth SMA market totals approximately $2.1 trillion in assets and is growing at approximately 15% annually and 35% among RIAs, according to Cerulli Associates. The use of option overlay strategies in the SMA market has also grown as well as markets have reached new highs in the past few years and investors accumulated concentrated stock positions. BlackRock expects the use options strategies in SMAs will continue to grow as investors continue to look for better ways to tackle a market that is volatile market and has low yields.