Once upon a time, there was an easy way to tell the man on the street the difference between Blackstone and BlackRock. Blackstone was a private equity colossus, while BlackRock was a giant institutional and retail money manager. Now, all of a sudden, this distinction has become fuzzier.
BlackRock, which oversees more than $3.6 trillion in assets worldwide, is set to start its own private equity group, hiring three founders of Merrill Lynch’s private equity arm to help it become a player in the last alternative area where BlackRock lacked a direct presence.
The new private equity group will be part of BlackRock’s alternative investment division, which manages some $115 billion in assets, already one of the country’s largest alternative asset managers. Although the firm offers private equity through funds of funds, today’s announcement trumpets the firm’s intention to create its own branded private equity funds.