BlackRock Inc., a popular asset management firm, has agreed to acquire MGPA, a Singapore based private equity firm, for an undisclosed amount, according to various media reports. BlackRock's acquisition is part of its global real estate expansion plan and also marks its debut in the Asian market.
The buyout will boost BlackRock's property portfolio to $25 billion. The company will take over all MGPA assets worth $12 billion. The company stated that there was "virtually no overlapping" between the two companies, in terms of the teams and the products and the acquisition will probably be quite a smooth process, reports Investment Week.
The deal is slated to be completed by the third quarter of 2013. BlackRock has a good market presence in the U.S. and the U.K. This deal will allow the company to extend its Asia Pacific services. The new portfolio's services will be focused 65 percent on Asia and 35 percent in Europe.
"Today's agreement advances BlackRock's growth strategy in Asia-Pacific and Europe, where we are seeking to enhance our local offerings and build on the firm's real estate experience. It further strengthens our ability to offer clients an unrivaled set of solutions to the challenges of a low-return, high volatility environment, including access to MGPA's top-performing investment teams and exceptional capabilities in key markets," Jack Chandler, global real estate head of BlackRock, said in a statement.
Meanwhile, MGPA is also very happy with the acquisition. The company was looking for suitable acquisition deals in order to expand its portfolio globally since the financial crisis started. Sometime in September to October 2012, it hired Berkshire Capital Securities to find a company that has no establishment in the Asian region, reports Financial Times.
"In BlackRock we have found an excellent asset manager to partner with who has a deep fiduciary culture, industry-leading risk management capabilities, and the same commitment we have to delivering superior investment performance to our clients. We are pleased about the many compelling opportunities this combination offers to both our clients and employees," Jim Quille, Executive Chairman of MGPA, said in the statement.
By the end of March 2013, BlackRock managed around $3.9 trillion worth of international assets. The company recently announced that it would be hiring around 300 more lawyers to deal with the various banking regulations in various countries as it manages a large number of bank debts and equity, reports Reuters.