BlackRock to Buy Equity-Index Provider Aperio for $1 Billion -- Update
By Kimberly Chin and Dawn Lim
BlackRock Inc. is acquiring Aperio Group LLC, a firm that helps
build custom portfolios for wealthy individuals, for $1.05 billion,
in a push by the world's largest money manager to add more
personalization to its offerings.
In buying Aperio, BlackRock is betting on growing interest by
individuals for portfolios tailored to their values. Aperio is part
of the so-called direct indexing industry, a small-but-expanding
part of the financial space.
Such firms create indexes and portfolios that can be customized
to exclude certain stocks or have more exposure to other sectors.
Sausalito, Calif.-based Aperio has worked with financial advisers
to tailor bespoke client portfolios. For instance, it could build a
portfolio without tobacco exposure that has more renewable energy
These portfolios are created for single investors rather than
forcing investors to be stuck with others in a fund. A provider of
such separately managed accounts for U.S. wealth managers,
BlackRock said the combination will help increase those assets by
about 30% to over $160 billion.
BlackRock doesn't sell products directly to individuals, like
brokerages do. Instead, it works through intermediaries. It has
been seeking alternative ways to broaden its reach over the wealth
management industry business of how individuals' money is invested.
BlackRock has said it has no desire to buy rival firms simply to
drive down costs through economies of scale but would look to
tactically grow in select areas, including expanding its
With the deal, BlackRock also acquires the company's experience
in the complex task of optimizing after-tax returns.
Aperio, backed by private-equity firm Golden Gate Capital, had
been in talks with a number of asset managers over the past year, a
person familiar with the matter said. After Morgan Stanley
announced plans to buy Eaton Vance -- a deal that gives it direct
indexing firm Parametric -- in October, Aperio's talks with various
firms heated up, a person said.
BlackRock plans to operate Aperio as a separately branded team
within its wealth advisory business.
Aperio's Chief Executive Officer Patrick Geddes will stay in his
role as the company's chief tax strategist and will also become a
senior adviser at BlackRock.
Write to Kimberly Chin at firstname.lastname@example.org and Dawn Lim at
(END) Dow Jones Newswires
November 23, 2020 19:43 ET (00:43 GMT)
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