Black River to Split From Cargill Into Three New Firms

  • Cargill says it will remain as an investor in the new firms
  • Black River CEO Gary Jarrett to retire effective Oct. 1

Black River Asset Management, the investment firm that said in July it was liquidating four hedge funds, is to be broken up and spun off from commodity trader Cargill Inc. after 12 years.

Black River’s board, which includes Cargill Vice Chairman Emery N. Koenig, decided Friday on the split after conducting a review, Lisa Clemens, a Cargill spokeswoman, said in an interview Monday. The move will create three new employee-owned firms, each focused on a specific area: fixed income and relative value, emerging market credit and private equity.

Black River Chief Executive Officer Gary Jarrett will retire effective Oct. 1. Minneapolis-based Cargill will remain as an investor in the three firms while two Black River commodity funds focused on agriculture and energy will be moved in-house to the company’s risk-management unit. The process will occur in the next few months, with the exact timing still to be finalized, Clemens said.

The split comes after a difficult few months for Cargill, the largest closely held U.S. company. A month after confirming the liquidation of the four Black River funds, Cargill reported a quarterly net loss for the first time in 14 years, amid a slowdown in emerging markets, which the closely held company has invested in heavily in recent years.

Brazil Talks

While Cargill is undertaking steps to improve its financial performance, those processes are separate from what’s happening at Black River, which has always operated as an independently managed subsidiary, Clemens said.

Black River said in July it’s closing funds that invest in equities, emerging markets, commodities, as well as a fund that focuses on Europe, Middle East and Africa. It said at the time that the $1.8 billion Fixed Income Relative Value Opportunity Fund, its largest fund, will continue to operate, as will its emerging markets credit strategies fund.

Earlier this month, Black River said it’s in advanced talks to buy sugar-cane mills from Antonio Ruette Agroindustrial Ltd. in Brazil.

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