BlackRock Takes Stake in Owner of Sports Illustrated, Nine West -- Update
August 11 2019 - 7:02PM
Dow Jones News
By Miriam Gottfried and Cara Lombardo
BlackRock Inc. has become the largest shareholder of the company
that owns brands including Sports Illustrated, Nine West and
Aéropostale in the first deal for the investment giant's new
private-equity fund.
BlackRock is taking an $875 million stake in Authentic Brands
Group LLC that values the closely held brand development, marketing
and entertainment company at more than $4 billion including debt,
according to people familiar with the matter.
BlackRock is set to supplant private-equity firm Leonard Green
& Partners as Authentic Brands' largest shareholder. Leonard
Green and other shareholders, including private-equity firms
General Atlantic and Lion Capital LLP, will remain invested but
will sell down their stakes to make room for BlackRock.
Authentic Brands' management, led by Chief Executive Jamie
Salter, will also continue to own a significant stake.
BlackRock, the world's biggest money manager, has been trying to
diversify away from exchange-traded and index funds, which
comprised two-thirds of its roughly $6 trillion in assets and were
responsible for about 40% of its revenue in 2018, and into business
lines that allow it to lock up money for longer and charge higher
fees.
Long Term Private Capital, as the BlackRock private-equity fund
is known, was designed to emulate sovereign-wealth funds and other
such pools by allowing its managers to hold bets for as long as
they desire. The model sets it apart from the majority of
private-equity funds, which are required to sell off assets and
return capital to investors within a set period of time.
But the experiment has been slow to get off the ground, in part
because BlackRock began pitching it to investors before a full team
was in place to staff it, The Wall Street Journal has reported. The
firm, which set out last year to raise at least $12 billion, said
in April it had accumulated $2.75 billion.
Other big asset managers, drawn to the higher fees and returns
private equity has traditionally offered, are watching BlackRock's
venture closely. Vanguard Group recently had discussions with a
handful of private-equity firms as the indexing giant weighs
whether to partner with them to offer their funds to its investors,
the Journal has reported.
Colm Lanigan, a BlackRock managing director and a senior
official at Long Term Private Capital, has a longstanding
relationship with Authentic Brands and led the deal, for which
there was no auction process.
Mr. Lanigan, who joined BlackRock earlier this year, previously
led North American private-equity and built the principal-investing
business at sovereign-wealth fund Abu Dhabi Investment Authority,
or ADIA, which is a cornerstone investor in the BlackRock fund.
Founded in 2010 by Mr. Salter, Authentic Brands owns and
licenses a global portfolio of 50 entertainment and lifestyle
brands responsible for $9.3 billion in annual retail sales. The
company, which has roughly doubled its sales and earnings over the
past two years, has high margins and considerable visibility into
future revenue, making it a good fit for the long-term strategy,
people familiar with the matter said.
Write to Miriam Gottfried at Miriam.Gottfried@wsj.com and Cara
Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
August 11, 2019 18:47 ET (22:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
BlackRock (NYSE:BLK)
Historical Stock Chart
From Aug 2024 to Sep 2024
BlackRock (NYSE:BLK)
Historical Stock Chart
From Sep 2023 to Sep 2024