BlackRock compra Quellos

BlackRock to Buy Quellos Unit for Up to $1.7 Billion (Update2)

By Andrei Postelnicu

June 26 (Bloomberg) -- BlackRock Inc., the largest publicly
traded U.S. asset manager, agreed to buy a fund unit of Quellos
Group LLC for as much as $1.7 billion to expand in one of the
fastest growing parts of the money management business.
BlackRock, which oversees about $1.15 trillion, will pay $562
million in cash and $188 million in stock for Quellos's funds that
invest in other funds, the companies said in a statement today.
New York-based BlackRock will also pay as much as $970 million
over the next 3 1/2 years if unspecified conditions are met.
``We are extremely excited to welcome the Quellos team to
BlackRock,'' Chief Executive Officer Laurence D. Fink said in the
statement. ``We will combine our hedge and private equity fund of
funds activities on a unified platform.''
The combined business will be one of the largest fund of
funds managers in the world, with more than $25.4 billion in
assets, BlackRock said. Funds of funds typically invest in a range
of different hedge or private equity funds to diversify risk and
provide more predictable returns.
Quellos, based in Seattle, looks after more than $20 billion
in assets. Jeffrey Greenstein, Quellos's CEO, will step down from
his post after the completion of the transaction. He will remain
as an adviser to help with the transition, BlackRock said.

Adding Money

Bryan White, chief investment officer at Quellos, will become
BlackRock's global head of funds of funds, to be renamed BlackRock
Alternative Advisors.
Quellos has been investigated for tax-advisory activities it
has discontinued and which are not part of the transaction with
BlackRock, the companies' statement said.
BlackRock was advised in the transaction by New York-based
Citigroup Inc. and law firm Skadden, Arps, Slate, Meagher & Flom
LLC. Quellos was advised by UBS AG and the law firm Paul Weiss
Rifkind Wharton & Garrison LLP.
The transaction is expected to close around Oct. 1, pending
regulatory approvals, the companies said.
Hedge funds attracted $60 billion in new money in the first
quarter, bringing industry assets to $1.57 trillion, according to
Chicago-based Hedge Fund Research Inc.

--Editor: Connelly