BlackRock to Acquire Quellos Division for Up to $1.7 Billion

Asset management company BlackRock, Inc. has signed a definitive agreement to acquire the fund-of-funds business of Quellos Group LLC for up to $1.7 billion. The Quellos unit assembles portfolios of hedge funds, an increasingly popular investment among investors who seek alternatives to equities and bonds. These investors are also attracted to private equity and real estate. "You're seeing a global reallocation into those categories," said BlackRock Chairman and CEO Laurence Fink. "We needed more depth." BlackRock will pay $562 million in cash and $188 million in BlackRock common stock at closing, with Quellos entitled to up to an additional $970 million in cash and stock over three and a half years if certain conditions are met. BlackRock, the largest public mutual fund company in the country, manages about $1.15 trillion. The deal is expected to close on or around October 1, 2007.

Sources: Press release, Bloomberg, Reuters, Wall Street Journal, Business Week, RTTNews
Commentary: Covestor and VesTopia: Winners and Losers from Peer to Peer Investing • Outsourcing Asset Management is Hurting the Insurance Industry
Stocks/ETFs to watch: BlackRock, Inc. (BLK). Competitors: Federated Investors Inc. (FII), Legg Mason Inc. (LM)

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