BlackRock to Acquire SpiderRock Advisors

Acquisition will expand BlackRock's offerings in personalized separately managed accounts

SMAs are one of the fastest growing product segments in the U.S. wealth industry

BlackRock BLK has agreed to acquire the remaining equity interest in SpiderRock Advisors ("SRA"), a leading provider of customized option overlay strategies in the U.S. wealth market. This transaction expands on BlackRock's minority investment in SRA made in 2021 and reinforces BlackRock's commitment to personalized separately managed accounts (SMAs).

"By giving BlackRock more SMA capabilities, this acquisition will enable us to meet growing demand from wealth managers for personalized, tax-efficient portfolios. We look forward to fully integrating SRA's team and capabilities into our U.S. Wealth Advisory business and to further expanding our offerings in SMA solutions," said Joe DeVico, Co-Head of BlackRock's U.S. Wealth Advisory business.

SMAs are one of the fastest-growing product segments in the U.S. wealth industry. They are expected to grow from $2.7 trillion in AUM as of Q3 2023 to $4 trillion by 2026 according to Cerulli Associates, fueled by a fundamental client need: the desire to customize portfolios for unique tax, values-alignment, or investment outcomes. Advances in technology have made it even easier to access SMAs, and client demand for personalization continues to grow.

"Each investor has unique circumstances inherent with a concentrated stock position or existing SMA portfolio. SRA's highly complementary solutions can provide advisors with a comprehensive suite of customization capabilities that help solve clients' unique challenges, such as income generation, downside protection, and tax-efficiency through the use of options," said, Eve Cout, Head of Portfolio Design & Solutions pillar within BlackRock's U.S. Wealth Advisory business.

SRA managed approximately $4.8 billion in client assets as of February 2024. The firm's SMA strategies are focused on income and risk management for single securities as well as diversified portfolios using derivative overlay strategies, and are accessible through RIAs, family offices, national broker/dealers and institutional channels.

BlackRock is an industry leader in SMAs for U.S. wealth management-focused intermediaries, managing $186 billion in SMAs as of December 2023. The firm's SMA franchise specializes in providing customized strategies, including Aperio's direct indexing capability, actively managed fixed income, equity and multi-asset strategies to meet the growing demand for personalization in the marketplace.

"We are thrilled to fully join the BlackRock team, and to broaden access to SpiderRock Advisors' options management solutions for both taxable and tax-exempt investors," said Eric Metz, President and Chief Investment Officer of SpiderRock Advisors. "Innovative advisors and investors understand the value of options in their portfolios to better manage risk as we navigate a challenging capital markets landscape. We look forward to benefiting from BlackRock's global reach and deep industry relationships as we seek to help more advisors deliver tailored options strategies to empower their clients towards achieving their after-tax investment goals."

The transaction, expected to close in Q2 2024, is subject to customary closing conditions. The financial impact of the transaction is not material to BlackRock earnings. Financial terms were not disclosed.

Jones Day acted as legal counsel for SpiderRock Advisors, LLC. Kramer Levin Naftalis & Frankel LLP acted as legal counsel for BlackRock.

About BlackRock

BlackRock's purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate

About SpiderRock Advisors

SpiderRock Advisors, LLC is a Chicago-based asset management firm focused on providing customized option overlay strategies to investors. Combining technology with comprehensive derivative management expertise, SpiderRock Advisors is making it easy for financial advisors and institutions to add option overlay strategies to their portfolios. SpiderRock Advisors manages approximately $4.8 billion for firms in the RIAs, family office, national broker/dealers and institutional channels.

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