BlackRock, Inc. today announced that it has entered into a definitive agreement whereby it will acquire Swiss Re Private Equity Partners AG ("SRPEP"), the European private equity and infrastructure fund of funds franchise of Swiss Re. BlackRock and Swiss Re have also entered into a strategic alternative investment relationship agreement, centered on BlackRock Alternative Investors ("BAI"), which reinforces Swiss Re's current investments in SRPEP products and establishes other future Swiss Re commitments to the BAI platform.
Operating from Zurich, Hong Kong, New York and Bratislava, SRPEP had $7.5 billion in total commitments at May 31, 2012, including a significant commitment from Swiss Re as it invested alongside its clients. SRPEP will be integrated with BlackRock's existing private equity fund of funds group - BlackRock Private Equity Partners ("BRPEP"). The transaction extends BRPEP's investment capabilities into infrastructure investing, expands its European and Asian footprint, and establishes the unit's presence in Switzerland where BlackRock has a long-standing presence and history of service through employees in Zurich and Geneva.
With approximately $15 billion in client commitments, the unified platform brings together a group of exceptionally talented professionals and a strong line-up of complementary products. The team will invest in primary funds, secondaries and direct co-investment opportunities through core fund of funds, direct co-investment programs and other offerings.
"In an environment where yields are low and volatility is high, clients around the world are embracing alternatives which offer higher return potential and the ability to mitigate risk," said Matthew Botein, Managing Director and Head of BlackRock Alternative Investors. "We are thrilled to be welcoming Swiss Re Private Equity Partners to BlackRock and believe its well-respected capabilities enhance our ability to deliver innovative solutions to our global client base. BlackRock values its long-standing business relationship with Swiss Re and we are very pleased to be deepening that commitment through this transaction and strategic partnership."
David Blumer, Group Chief Investment Officer for Swiss Re, remarked: "BlackRock's extensive experience in managing private equity funds is extremely complementary to the SRPEP platform. Swiss Re is pleased to be strengthening its relationship with BlackRock as we see significant strategic benefits for our clients and great opportunities for our employees."
Russell Steenberg, Managing Director and Head of BRPEP will continue to lead the combined unit. Christian Hinze, Chief Executive Officer of SRPEP, will join BlackRock as Deputy Head of the combined business. There are no changes expected to the investment strategy or style of either business's existing offerings, each of which will continue to be managed by members of their existing portfolio management teams.
"Christian and his team have built a great business," said Mr. Steenberg. "The new team offers complementary investment management skills - including an especially strong capability in managing European funds. As we unify our collective offerings, our guiding principle will be to continue to deliver best-in-class service and products that meet our clients' investment objectives."
"Swiss Re is proud of the trust and confidence its clients have demonstrated as the SRPEP business continued to expand," stated Mr. Hinze. "The SRPEP team is enthusiastic about joining the BlackRock organization and looks forward to continuing its interaction with Swiss Re."
Martin Gut, Managing Director and BlackRock's Country Head of Switzerland, added: "This transaction marks BlackRock's continued investment in its Swiss franchise. Our larger presence in the country will facilitate our ability to better serve our local clients."
Following the satisfaction of customary closing conditions, the transaction is expected to be completed by the end of the third quarter of 2012. Terms of the all-cash transaction, which will be neutral-to-modestly accretive to BlackRock's 2012 earnings, were not disclosed.
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