BlackRock Inc., the world’s largest asset manager, will buy Swiss Re Ltd.’s Private Equity Partners AG for an undisclosed amount to extend its investments into infrastructure.
Swiss Re’s $7.5 billion European private equity and infrastructure fund of funds unit will be integrated with BlackRock’s existing business, the New York-based firm said today in an e-mailed statement. Those funds include a “significant” commitment from Swiss Re.
Laurence D. Fink, who co-founded BlackRock in 1988, has built the firm through a series of acquisitions, including the 2006 purchase of Merrill Lynch & Co.’s investment unit. BlackRock last year expanded the alternatives division, which manages hedge funds, real estate funds and private-equity strategies, and the Swiss Re acquisition extends the company’s capabilities into infrastructure investing.
“It’s partially complementary when it comes to infrastructure investments,” said Christian Muschick, a Frankfurt-based analyst with Silvia Qunadt Research. “It grows assets under management and they can integrate it into a larger unit and achieve some synergies from that potentially.”
The purchase expands BlackRock’s European and Asian business and establishes a presence in Switzerland for a unit that will have about $15 billion in client commitments, the firm said.
“In an environment where yields are low and volatility is high, clients around the world are embracing alternatives which offer higher return potential and the ability to mitigate risk,” Matthew Botein, managing director and head of BlackRock Alternative Investors, said in the statement.
Swiss Re, which said it will continue to hold the underlying investments, already invests via BlackRock. The world’s second-biggest reinsurer repurchased the unit in 2009 from hedge fund Horizon21 after disagreements over how the business should be run.
“It has grown over time and the business has now reached a size at which alternatives in ownership and the growth strategies would need to be evaluated,” Rolf Tanner, a spokesman for Zurich-based Swiss Re, said in a phone interview.