BlackRock Inc. announced Monday it had agreed to purchase Aperio, a pioneer in customizing tax-optimized SMAs, for $1.05 billion in cash from the private equity firm Golden Gate Capital.
The acquisition is funded from existing liquidity and is slated to close during the first quarter of 2021, according to the announcement. Sausalito, California-based Aperio managed about $36 billion in assets as of Sept. 30 with an average annual organic asset growth rate of nearly 20% over the past five years.
BlackRock managed approximately $7.81 trillion in assets as of Sept. 30.
The deal, which comes about six weeks after Morgan Stanley announced it will pay $7 billion to purchase fund manager Eaton Vance, advances BlackRock’s separate managed account assets by 30% to more than $160 billion.
The deal also expands BlackRock wealth managers’ access to personalized tax-managed strategies, broad market indexing and customized ESG portfolios for ultra-high net worth households and institutions served by private banks and the RIA market, according to the announcement.
The world’s largest asset manager is now in a position to take advantage of the growing SMA market, which totals approximately $1.7 trillion in assets and is increasing 15% year over year and 35% among RIAs, according to Cerulli Associates.
The demand for customized portfolios based on an ESG criteria, too, is growing among investors. In fact, ESG investing is set to capture $45 trillion by the end of this year, according to research from J.P. Morgan.
“The wealth manager’s portfolio of the future will be powered by the twin engines of better after-tax performance and hyper-personalization,” said Martin Small, head of BlackRock’s U.S. Wealth Advisory business. “The combination will bring institutional quality, personalized portfolios to ultra-high net worth advisers and will create one of the most compelling client opportunities in the investment management industry today.”
BlackRock plans to operate Aperio as a separately branded team within its U.S. Wealth Advisory business. Aperio will retain its investment, business development, client service and ESG-SRI processes under the leadership of Ran Leshem and Liz Michaels, who will become co-heads of the Aperio team upon joining BlackRock.
Current Aperio CEO, Patrick Geddes, will maintain his role as Aperio’s Chief Tax Strategist and become a BlackRock senior adviser, focusing on broadening portfolio construction research and tools for taxable investors across asset classes.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
