BlackRock completed its merger with the BofA Funds yesterday, officially becoming the second largest money fund manager with over $266 billion in US MMFs and $370 billion in money funds globally. A press release entitled, "BlackRock Closes Transaction to Transfer $80 billion of Client Assets from BofA Global Capital Management," explains, "BlackRock and Bank of America's asset management business, BofA Global Capital Management, have completed a transaction transferring investment management responsibilities of approximately $80 billion of AUM currently managed by BofA Global Capital Management to BlackRock. The assets of five taxable money market funds, a U.S. dollar offshore fund, a private fund and customized separate account strategies were transferred to BlackRock through this transaction."
The release says, "The combined platform of over $370 billion in assets under management will enable BlackRock and legacy-BofA Global Capital Management clients' broader access to high quality, global liquidity investment solutions. BlackRock will continue to enjoy a strong distribution partnership with Bank of America and will have expanded access to several broad distribution channels." (For more, see Crane Data's previous News stories: "Prudential Core MMF Goes Bond; BlackRock, BofA Approved; Calamos (4/4/16), "BofA Details Fund Mergers Into BlackRock MMFs; WSJ on Big Retail MMFs" (2/12/16), and "BlackRock Taking Over BofA MMFs in One of Biggest Acquisitions Ever" (11/10/15).)
Tom Callahan, BlackRock's Head of global cash management, comments, "This transaction shows our commitment to delivering outstanding liquidity solutions to our clients at a time of tremendous change in the cash management industry. By expanding our partnership with Bank of America, this transaction allows us to grow our global scale, enhance our extensive product offering and best in class risk management capabilities to serve a new universe of clients."
Michael Pelzar, President of BofA Global Capital Management (who will stay on with Bank of America in another capacity), says, "BlackRock is a best-in-class liquidity solutions provider with a demonstrated ability to deliver on clients' needs for liquidity and yield.... 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."
The statement adds, "The transaction was approved by both BlackRock and BofA fund boards, BofA fund shareholders and certain regulators. The financial impact of the transaction is not material to BlackRock earnings. Terms were not disclosed." Note: The BofA Funds will be removed from our Money Fund Intelligence Daily tomorrow, and from our monthly MFI XLS in the May issue. Watch for big asset increases in the BlackRock Liquidity funds as the BofA assets are absorbed.
A statement to shareholders, entitled, "BlackRock Cash Management Platform Expands," written by Callahan and BlackRock Cash Management MD and Chairman Rich Hoerner, says, "We are pleased to announce that we have completed our transaction with Bank of America's asset management business, BofA Global Capital Management, in which the investment management responsibilities of approximately $80 billion in short term liquidity assets were transferred to BlackRock. Five taxable money market funds reorganized into BlackRock money market funds, and a U.S. Dollar offshore fund, a private fund and customized separate account strategies were transitioned to BlackRock over this past weekend."
It adds, "We enthusiastically welcome our new clients joining from BofA Global Capital Management and thank our existing clients for your ongoing partnership. We believe that this transaction has made us stronger, with the additional scale an important component to a strong and successful liquidity investment platform."
Finally, BlackRock's letter says, "At a time of tremendous change for the cash management industry, our goal is to continue to seek to provide outstanding liquidity investment solutions and excellent client service to you. In this rapidly changing environment, we strive to be the partner that helps you understand these changes, gives you a fresh look at options available and introduces new and differentiated solutions in a historically homogeneous investment space. Thank you for the privilege of serving you. If we can be of any assistance, please do not hesitate to contact us."
To recap the US MMF changes: BofA Cash Reserves and BofA Money Market Reserves merged into BlackRock TempFund; BofA Government Plus Reserves merged into BlackRock FedFund; BofA Government Reserves merged into into BlackRock Federal Trust Fund; and, BofA Treasury Reserves merged into BlackRock T-Fund. BofA funds' Tax Exempt MMFs weren't integrated into the BlackRock platform and were liquidated earlier this month.
