BlackRock swoops for Swiss Re portfolio

The US investment manager has agreed to acquire Swiss Re Private Equity Partners, the European private equity and infrastructure fund of funds arm of the Swiss insurance and reinsurance firm.

BlackRock, the New York-listed investment manager with $110 billion of alternative assets under management, has agreed to acquire Swiss Re Private Equity Partners (SRPEP), the European private equity and infrastructure fund of funds outfit. Terms of the deal were not disclosed. 

With offices in Zurich, Hong Kong, New York and Bratislava, SRPEP had $7.5 billion in total commitments at the end of May this year. The deal will see SRPEP integrated into BlackRock’s existing private equity fund of funds group, BlackRock Private Equity Partners (BRPEP).

A statement released by BlackRock said the deal would extend its capabilities into infrastructure investing, expand its European and Asian footprint and bolster its presence in Switzerland.

The statement added that BlackRock and Swiss Re had entered a “strategic alternative investment partnership” which “reinforces” Swiss Re’s current investments in SRPEP products and establishes future Swiss Re commitments to the BlackRock Alternative Investors (BAI) platform, through which BlackRock has $110.4 billion of alternative assets under management in areas such as hedge funds, private equity, real estate and commodities.

BRPEP, which has $15 billion in client commitments, will invest in primary funds, secondaries and direct co-investment opportunities through core fund of funds, direct co-investment programmes 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 BAI, in the statement.

Russell Steenberg, managing director and head of BRPEP, will continue to head up the combined business. Christian Hinze, chief executive officer of SRPEP, joins BlackRock as deputy head of the combined business.

After “customary closing conditions” the deal is expected to complete by the end of September this year. Terms of the transaction, while not disclosed, were said to be “neutral-to-modestly accretive to BlackRock’s 2012 earnings”.