Fund management group BlackRock has expanded its global operation by swallowing up the fund of funds business of US based wealth management firm, Quellos Group, for around US1.7 billion.
The new group's combined operation will hold more than US$25.4 billion in assets under management on its fund of fund platform.
According to the 2006 annual reports of Australian Government Employees Superannuation Trust (AGEST), HESTA and Cbus, all three Australian super funds were invested in the Seattle-based wealth management firm.
The majority of the mandates covered alternative hedge fund strategies, with the remainder in fixed income.
The deal doesn't include Quellos' dormant tax-advisory business, which was subject to a federal grand-jury investigation, a related IRS inquiry and multiple civil lawsuits, relating to several tax-avoidance schemes a decade ago.
BlackRock said it won't assume any potential liabilities related to the former tax-shelter business.
BlackRock are set to pay Quellos' partner-owners around US$562 million in cash and US$188 million in stock upfront, up to US$375 million in cash and stock over the next 18 months and up to US$595 million in cash by 2010; with latter payments subject to the Quellos business meeting certain performance criteria.
