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Debt & Equity

Bank of America sells $87B fund business to BlackRock

In one of the largest deals in money market history, Bank of America is selling its $87 billion managed funds business to BlackRock.

Under the deal — the terms of which were not disclosed — BofA will transfer investment management responsibilities of AUM currently managed by BofA Global Capital Management to BlackRock.

The news comes as the second largest bank in America — behind JP Morgan Chase — attempts to streamline its business ahead of regulatory reforms set to take effect in 2016.

Money-market funds invest in relatively low-risk corporate and government debt that can be paid back relatively quickly.
BlackRock — already the biggest asset manager in the world — will grow its cash management business from $285 billion to $370 billion as a result of the deal.

TOM CALLAHAN
TOM CALLAHAN

“Expanding our partnership with Bank of America presents a tremendous growth opportunity for BlackRock’s cash management business. This partnership allows us to further leverage our global scale, comprehensive product suite and best-in-class risk management capabilities to serve a new universe of clients,” said Tom Callahan, BlackRock’s Co-head of global cash management.

“At a time of tremendous change in the cash management industry, this alliance underscores BlackRock’s commitment to market leadership in delivering outstanding liquidity solutions to our clients.”

“BlackRock and existing BofA Global Capital Management clients will benefit from a combined platform with greater scale and global reach,” added Rich Hoerner, BlackRock’s Co-head of global cash management. “Additional scale will better enable BlackRock to continue to manage client balances of various sizes and investment time horizons.”

Michael Pelzar, President of BofA Global Capital Management. “Our selection of BlackRock was made after careful consideration of our clients’ needs, our long-standing relationship with BlackRock, and their demonstrated ability to provide a comprehensive range of global liquidity management solutions.”

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