BlackRock is in preliminary discussions with Millennium Management to explore a potential strategic partnership that could see the world’s largest asset manager take a minority stake in one of the hedge fund industry’s most profitable firms, according to a report by the Financial Times.
The report cites unnamed insiders familiar with the matter as revealing that while any stake BlackRock might take in Millennium would likely be small, the prospective collaboration underscores BlackRock’s ambitions to expand further into alternative investments. For Millennium’s founder, Izzy Englander, 76, this move would represent a new phase of growth and diversification for the firm he founded in 1989 and would be the first outside investment in the business in its 35-year history.
The talks are still in an initial phase though, and it remains uncertain whether they will lead to a formal agreement.
Both firms declined to comment on the matter.
Multi-strategy firm Millennium manages around $70bn in assets and has posted a 10% return year-to-date through October, according to a source familiar with the fund’s performance, and for years, has weighed the benefits of strategic partnerships or external investment, with interest coming from a range of investors, including private equity firms and sovereign wealth funds.
Recently, the firm entered, and later withdrew from, talks with Schonfeld Strategic Advisors to explore a multi-billion-dollar collaboration, opting out when Schonfeld’s current investors committed additional funds.
BlackRock meanwhile, with $11.5tn in assets as of September, has pursued an aggressive acquisition strategy this year to build a comprehensive investment platform that spans both public and private markets.
In October, BlackRock finalised a $12.5bn acquisition of Global Infrastructure Partners, significantly expanding its footprint in global infrastructure investment.
