Last updated: 07:51 / Monday, 31 May 2021
For 1.05 billion dollars

BlackRock to Acquire Provider of Personalized Index Solutions Aperio

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  • The acquisition will boost BlackRock’s SMA assets by roughly 30% to over 160 billion dollars
  • The transaction expands the personalization capabilities available to wealth managers from BlackRock across factors, broad market indexing and ESG preferences
  • BlackRock plans to operate Aperio as a separately branded, vertically integrated team within its U.S. Wealth Advisory business

BlackRock has entered into a definitive agreement to acquire Aperio, a pioneer in customized index investing, for 1.05 billion dollars. The asset manager announced in a press release that they will buy the business from Golden Gate Capital, a private equity company, and will incorporate Aperio’s employees.

BackRock is already a provider of SMAs for U.S. wealth management-focused intermediaries, specialized in customized actively-managed fixed income, equity, and multi-asset strategies. The firm pointed out that this acquisition will boost its SMA assets by roughly 30% to over 160 billion dollars.

It also “expands the breadth of personalization capabilities available to wealth managers from BlackRock via tax-managed strategies across factors, broad market indexing, and investor ESG preferences”. In its view, the combination with Aperio will set a new standard for personalized whole portfolio solutions in the SMA market.

“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, working together, will bring unmatched capabilities to meet these objectives. 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”, said Martin Small, head of BlackRock’s U.S. Wealth Advisory business.

Meanwhile, Aperio co-heads, Liz Michaels and Ran Leshem, commented that the they have 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.

“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 and inclusion, and a track record of delivering consultative whole portfolio solutions to wealth management intermediaries. We are excited to harness BlackRock’s capabilities and reach to keep innovating on behalf of an even larger base of wealth managers and institutional investors”, they added.

Vertical integration

Aperio is a pioneer in customizing tax-optimized index equity SMAs to deliver wealth managers capabilities that “embrace the uniqueness of each investor and enhance after-tax performance”. It also pioneered individually personalized ESG portfolios that enable investors to elevate the purpose of their wealth and make an impact on causes deeply important to them.

Aperio’s high-touch consultative client service model focuses on ultra-high net worth households and institutions served by private banks and the fast-growing independent registered investment advisor (RIA) market. The U.S. retail and wealth SMA market totals approximately 1.7 trillion dollars in assets and is growing at approximately 15% annually and 35% among RIAs. With over 36 billion dollars of assets under management as of September 30, 2020, Aperio has outpaced the industry with an average annual organic asset growth rate of nearly 20% over the past five calendar years.

BlackRock plans to operate Aperio as a separately branded, vertically integrated 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 team. Their current CEO, Patrick Geddes, will maintain his role as Aperio’s Chief Tax Strategist and become a BlackRock senior advisor, focusing on broadening portfolio construction research and tools for taxable investors across asset classes.

“We are thrilled to welcome the Aperio team to BlackRock. We look forward to bringing Aperio’s innovative mindset in financial services to BlackRock and drawing on the team’s decades of experience to expand our offerings to even more advisors and their clients. This transaction deepens our presence in the San Francisco area and reflects the critical importance to BlackRock of tapping the innovation taking place on the West Coast of the U.S”, said BlackRock’s Chief Client Officer, Mark McCombe.

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